8 Wastes T.DINESH KALUM OPERATIONS TRANSFORMATION GUIDE OPS TRANS GUIDE CD-OS training 8 Wastes OPERATIONS TRANSFORMATION GUIDE T.DINESH KALUM Industrial Engineer Specialist Integration Lean  | Lean Integration Specialist Sri Lanka. From lean transformation training workshop 2013

OBJECTIVES This session will . . . Describe “value” and “value stream” OPS TRANS GUIDE CD-OS training OBJECTIVES This session will . . . Describe “value” and “value stream” Define “muda” (worse than waste) Discuss each of the 8 wastes Discuss guidelines for identifying and reducing waste

VALUE AND VALUE STREAM Value OPS TRANS GUIDE CD-OS training VALUE AND VALUE STREAM Value Defined by the ultimate customer as the goods and services that they are willing to pay for because it meets their requirements Value stream The set of all actions (value adding and nonvalue adding) that transforms materials into a product or actions into a service to meet customer requirements

VALUE STREAM MAP – PLANT B OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training VALUE STREAM MAP – PLANT B Minutes for 1 unit Unload components from truck and shrink wrap pallet Load elevator Scan Unwrap Stage Remove material Hose Bottleneck operation I I Inspection I Obs: 60,000 uph Max: 60,000 uph Obs and Max: 270,000 units Obs: 38,000 uph Max: 160,000 uph Obs: 4,000 units Max: 8,000 units Obs: 38,000 uph Max: 120,000 uph Obs: 60,000 units Max: 80,000 units Nonvalue add 3 min. 146 min. 7 min./elevator 4 min. 0.5 min. 10.6 min. Preblending Grind Load mixer Mix and unload Weigh Wrap Transport Air dry Staged inventory I Final grind Table WIP Obs and Max: 559,000 Obs: 21,000 uph Max: 40,800 uph Obs: 12,500 units Max: Obs: 3,500 units Max: Obs: 41,400 uph Max: 49,000 uph Obs: Max: 559,000 units Value add 1.6 min. 7.6 min. 0.6 min. 1,440 min. 15 min. Nonvalue add 1 1.7 min. 3 0.5 min. 5 2.5 min. 5,760 min. 35 min. 10 min. 2 4 6 WIP Fill mold Rack WIP at table Convert Remove mold Separate Sort Pack Raw hold Obs: 21,364 uph Max: 21,364 uph Obs: 7,000 units Max: Obs: 7,200 units Max: Obs: 14,800 uph Max: 25,200 uph Obs: 14,800 uph Max: 103,000 uph Obs: 21,240 units Max: Obs: 14,400 uph Max: Obs: 12,000 uph Max: Obs: 12,000 uph Max: Value add 0.001 min. 243 min. 70 min. 0.01 min. 0.09 min. 0.09 min. Nonvalue add 33 min. 60 min. 420 min. Box Palletize Warehouse Current process time – 5.8 days Value-added time – 1.3 days Obs: 12,000 uph Max: Obs: 12,000 uph Max: ? Value add 0.09 min. 0.09 min. 0.09 min. Source: Floor observation, production records

VALUE-ADDED WORK IS A SMALL INCREMENT OF ALL ACTIVITIES OPS TRANS GUIDE CD-OS training VALUE-ADDED WORK IS A SMALL INCREMENT OF ALL ACTIVITIES Value-added work Non-value- added (waste) “Every time material is handled something is added to its cost, but not necessarily to its value” – Henry Royce Cofounder of Rolls-Royce Non-value-added (necessary)

“MUDA” IS DESPICABLE WASTE OPS TRANS GUIDE CD-OS training “MUDA” IS DESPICABLE WASTE Muda conveys an attitude that waste is so despicable that people would do anything to get rid of it quickly and prevent it from coming back WASTE WASTE – materials or resources beyond what is needed to meet customer requirements

THE 8 TYPES OF WASTE Overproduction 1 Motion 7 2 Waiting Intellect 8 6 OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training THE 8 TYPES OF WASTE Overproduction 1 Motion 7 2 Waiting Intellect 8 6 3 Rework Transportation 5 4 Inventory Overprocessing

THE CAUSES OF WASTE Overproduction OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training THE CAUSES OF WASTE Overproduction Failure to examine the total cost of a product or service Misunderstanding of the customer’s true requirements Pressure to maximize production to justify expensive equipment and technology costs Antiquated policies Variability in machinery or processes Poor management/ workforce relations 1 Motion 7 2 Waiting Intellect 8 6 3 Rework Transportation 5 4 Inventory Overprocessing

BENEFITS TO REDUCING 8 WASTES OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training BENEFITS TO REDUCING 8 WASTES To the customer To the company To the associate Product that meets all expectations Reduced costs Improved quality Increased flexibility in operations Improved reputation Easier work Safer work environment Consistent work tempo Increased pride in work area and work quality

APPLICATION – OVERPRODUCTION OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training APPLICATION – OVERPRODUCTION To produce sooner or in greater quantities than what customers demand Example: Buying vegetables for 1 month on a weekly shopping trip Overproduction can prevent other essential activities from taking place Overproduced items need to be stored (inventory) and create further waste Produce only what the customers want, when they want it

OVERPRODUCTION – EXAMPLES OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training OVERPRODUCTION – EXAMPLES Overproduction 1 7 2 Waiting Motion Intellect 8 6 3 Rework` Rework Transportation Transportation 5 4 Inventory Overprocessing

OPS TRANS GUIDE CD-OS training APPLICATION – WAITING Underutilizing people or parts while a process completes a work cycle Example: Arriving an hour early for a meeting Most machines do not need supervision Essential wait time can be filled productively Rebalance activities to remove waiting, then make essential waiting visible

Waiting WAITING – EXAMPLES Overproduction 1 7 2 Motion Motion OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training WAITING – EXAMPLES Overproduction 1 7 2 Waiting Motion Motion Intellect 8 6 3 Rework Rework Transportation Transportation 5 4 Inventory Overprocessing

APPLICATION – TRANSPORTATION OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training APPLICATION – TRANSPORTATION Unnecessary movement of parts or people between processes Example: Building a dining room and kitchen at opposite ends of a house, then keeping it that way Result of a poor system design and/or layout Can create handling damage and cause production delays Relocate processes, then introduce standard sequences for transportation

TRANSPORTATION – EXAMPLES OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training TRANSPORTATION – EXAMPLES Overproduction 1 Motion 7 2 Waiting Intellect 8 6 3 Transportation 5 4 Inventory Overprocessing

APPLICATION – OVERPROCESSING OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training APPLICATION – OVERPROCESSING Processing beyond what the customer requires Example: Stirring a fully mixed cup of coffee May result from internal standards that do not reflect true customer requirements Often arises where standards are difficult to define May be an undesirable effect of an operator’s pride in his work Provide clear, customer-driven standards for every process

EXAMPLE – OVERPROCESSING OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training EXAMPLE – OVERPROCESSING Overproduction Overproduction 1 7 2 Waiting Motion Intellect 8 6 3 Rework Rework Transportation 5 4 Overprocessing Inventory

APPLICATION – INVENTORY OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training APPLICATION – INVENTORY Material that is not adding value Example: Clothes taken on vacation, not worn, then brought back at the end of vacation May be raw material, WIP, or finished products Symptomatic of a hidden problem Increases operational costs (storage, risk of obsolescence) Increases manufacturing lead time Improve production control system and commit to reduce unnecessary “comfort stocks”

Inventory INVENTORY – EXAMPLES Overproduction 1 7 2 Waiting Motion OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training INVENTORY – EXAMPLES Overproduction 1 7 2 Waiting Motion Motion Intellect 8 6 3 Rework Rework Transportation Transportation 5 4 Inventory Overprocessing

Analyze and solve root causes of rework OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training APPLICATION – REWORK Repetition or correction of a process Example: Returning a plate to the sink after it has been poorly washed Rework is failure to meet the “do it right the first time” expectation Can be caused by methods, materials, machines, or manpower Requires additional resources so that normal production is not disrupted Analyze and solve root causes of rework

REWORK AND SCRAP – EXAMPLES OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training REWORK AND SCRAP – EXAMPLES Overproduction 1 7 2 Waiting Motion                             Intellect 8 6 3 Rework Transportation 5 4 4 Overprocessing Inventory

OPS TRANS GUIDE CD-OS training APPLICATION – MOTION Unnecessary movement of parts or people within a process Example: Locating (and keeping) a refrigerator outside the kitchen Result of a poor work station design/layout Arrange people and parts around stations with work content that has been standardized to minimize motion

Motion MOTION – EXAMPLES Overproduction 1 7 2 Waiting Intellect 8 6 3 OPS TRANS GUIDE CD-OS training MOTION – EXAMPLES Overproduction 1 Motion 7 2 Waiting Intellect 8 6 3 Rework Transportation Transportation 5 4 Inventory Overprocessing Over-processing

THE 8TH WASTE – INTELLECT OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training THE 8TH WASTE – INTELLECT “The biggest issue is making us see that management is going to make it happen“ “We know what needs to be done. We tell management, but they don’t listen” Overproduction 1 7 2 Waiting Motion Motion The 8th waste is the untapped, latent potential of people’s ideas and actions Intellect 8 8 6 3 “We’ve been through this sort of program before and nothing ever changes . . .” Intellect Rework Rework Transportation “Management never speaks to us” 5 4 Inventory Overprocessing

Overproduction 1 THE WORST WASTE? Motion 7 2 Waiting 8 6 3 Rework OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training THE WORST WASTE? Overproduction 1 Motion 7 2 Waiting 8 6 3 Rework Transportation 5 4 Inventory Overprocessing

Identify examples of waste Suggest improvement ideas OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training ACTIVITY Identify examples of waste All lean concepts strive to continually identify and reduce waste from operations Suggest improvement ideas

ACTIVITY – GIVE IDEAS A CHANCE, DO NOT ACCEPT EXCUSES OPS TRANS GUIDE CD-OS training OPS TRANS GUIDE CD-OS training ACTIVITY – GIVE IDEAS A CHANCE, DO NOT ACCEPT EXCUSES We have tried that one many times . . . Who is going to do the work . . . Theoretically a good idea, but in practice . . . This has to be approved by Joe Manager, and I am sure he will not like it . . . We are already better than our competitors . . . Maybe it works in Plant X, but our situation is totally different . . . If this was really such a good idea, why hasn't anybody else tried it already . . . The day only has 24 hours . . . Our directors (or work force) will never agree to this . . .

OPS TRANS GUIDE CD-OS training SUMMARY The customer defines value and is willing to pay for products and services that meet his/her requirements Muda is despicable waste Does not add value May be incidental work (necessary evil) Waste is described in 8 categories Overproduction Waiting Transportation Overprocessing Inventory Rework Motion Intellect Lean tools are all designed to reduce or eliminate waste Efforts to eliminate waste are continuous and can begin NOW!

OPS TRANS GUIDE CD-OS training REFERENCE MATERIALS “Lean Thinking, Banish Waste, and Create Wealth in Your Corporation” by James P. Womack and Daniel T. Jones. (Simon and Schuster, 1996)