As you know, processes are the engines that drive your company. You already know what you want to achieve. So, you need a systems approach to analyze and find possible improvements and the best way to start is to identify waste and work on improvements. In this situation, one tool that can help you design your business strategy is 7W (7 Wastes) from lean production, categorizing unproductive manufacturing practices identified by Taiichi Ohno, the father of the Toyota Production System (TPS). Let’s look at the seven wastes you must eliminate.

What is Lean Waste?

Lean waste, also known as the 7 wastes or Muda is a concept from the Toyota Production System and is used by many companies around the world. It’s focused on any activity or process that doesn’t add value to the end product or service for the customer. If you eliminate these wastes, your organization can be more efficient and save time, money, and resources.

What is Muda (Lean Waste)

When we talk about waste, or wasteful activities in lean manufacturing, we think about any activity that simply uses resources but does not add any value to the customer. This can be anything from unnecessary steps in a specific process to extra inventory or waiting time. There are seven types of waste, each with its own characteristics and solutions.

Muda is a Japanese word for waste, and the Lean concept refers to the process of discovering and eliminating all wasteful activities inside business processes. Sometimes, Muda is called “Lean waste” or “non-value-adding activities.”

The end goal of using this process is to identify and eliminate waste so that resources can be used better and more efficiently. By doing so, you can reduce costs and increase customer satisfaction by delivering higher-quality products or services faster.

History of the 7 Wastes: Toyota Production System

The 7 wastes were developed and, for the first time, implemented by Taiichi Ohno for the Toyota Production System (TPS). TPS is a production system based on continuous improvement and waste elimination created after World War II in Japan when resources were scarce, and efficiency was the key to survival.

Ohno identified 7 types of waste in business processes: overproduction, waiting, transportation, processing, inventory, motion, and defects. These wastes that are still actual in many organizations simply consume organizational time and resources and also affect product quality and customer satisfaction.

TPS is a philosophy that gets rid of waste and maximizes value-added activities in the process. It’s based on the concept of “Just-In-Time” (JIT) production, which means producing only what is needed, when it’s needed, and in the exact quantity needed. This reduces inventory costs and space.

The 7 Wastes of Lean

Now, let’s look at all seven wastes of lean production:

1. Over-Production Waste

Over-production waste will appear when your manufacturing process produces more products than the market needs or demands. This can result in excess inventory, storage costs, and potential spoilage or obsolescence of products.

Producing products or services in advance or more than the current demand wastes money, time, and space. Overproduction is not only for manufacturing companies, but it is present in all types of companies. For example, overproduction can appear when you develop the features of products and services that aren’t something your customers want. Or, at least, you are not sure that your customers want them.

To combat this waste, businesses should focus on demand forecasting to better understand how much product is needed. Lean production techniques such as just-in-time manufacturing can also help reduce overproduction by producing only what is needed when it is needed.

Understanding customer needs and demand and adapting production accordingly can greatly reduce the amount of wasted resources and materials.

Related: Essential Process Improvement Toolbox: Top Tools to Improve Efficiency and Productivity

2. Waiting Waste

Waiting waste involves idle time or waiting for raw materials, work-in-progress items, information, or equipment. This can occur due to poor planning, inefficient processes, or unreliable suppliers.

The biggest reason for ineffectiveness in manufacturing is the waiting time of the processes. In such a case, you waste time when one process waits to begin while the other finishes. Therefore, you need to ensure that the flow of operations is smooth and continuous. This can also become part of your business strategy.

Optimizing processes and simplifying workflows can help combat waiting waste. A just-in-time inventory system can help reduce waiting times for materials, as goods are only ordered and delivered when needed. Communicating with suppliers regularly and setting clear expectations can also help prevent delays in receiving necessary materials.

Technology like real-time tracking systems can also provide visibility into the status of materials or equipment, allowing for proactive management and minimizing wait times.

3. Transportation

Transportation is moving products or materials between processes from one place to another without adding value to the end customer. Complex production processes can contribute to transportation waste by increasing the risks of damage during movement and creating inefficiencies. Excessive movement can lead to wasted time and resources and potential damage to products, which means external failure costs that, in some cases, can be catastrophic for any company.

As you can see, these times add no value to the products/services. So, they create costs and can damage the products, equipment, or operators. A change in layout can often help reduce these harmful effects.

Examples of transportation waste include unnecessary transportation of raw materials or finished goods. This can happen due to poor layout, inefficient routing, or a lack of standardized processes. Excessive handling and product loading/unloading also contribute to this waste.

4. Over-processing Waste

Over-processing waste involves using more resources than necessary to produce a product. This could include excessive energy, labor, or materials. Inefficient processes or a lack of clear understanding of customer needs can cause overprocessing.

Sometimes, we complicate things in process development and, in such a way, bring over-processing waste. However, if you analyze the work processes, you will quickly notice that they have integrated certain activities that are not important for producing your products or services.

To combat over-processing waste, you should focus on simplifying and improving work processes and continuously evaluating efficiency. Using quality control measures to ensure products are produced to the necessary standards can also help reduce this type of waste.

5. Excess Inventory

This waste in lean manufacturing is related to excess inventory that is not being used or sold. Inventory waste can lead to increased storage costs, obsolescence, and reduced cash flow. It can also hide underlying problems in the production process.

With excessive inventory, you spend your cash flow on stock products that you cannot still sell and take up storage space for products or materials not needed now.

Ask yourself the following question: do you need such an amount of inventory for your business’s normal operations? What do you need to do to decrease the inventory level in your company?

One main cause of this waste is overproduction – producing more than the market needs or demands. Other causes include inaccurate forecasting, poor quality leading to excess scrap and rework, and production delays.

To minimize this waste, you should implement just-in-time (JIT) production systems, which means producing only what is needed and only when it is needed. You can also use visual management tools like Kanban boards to track inventory levels and ensure they are not overproducing.

6. Motion Waste

Motion waste is the unnecessary movement of employees or equipment in the workplace.

Work involves many movements on or around employees’ workstations. Analyze all movements, and you will see opportunities to reduce the number of movements and time an employee takes to do the work. That means increased productivity, reduced production costs, and reduced product or service costs in the form of value you deliver to your customers.

Wasted motion is walking, lifting or bending to get materials or tools. That wastes employee’s time and energy and increases the risk of workplace injury.

To reduce motion waste, try implementing lean techniques like 5S (sort, set in order, shine, standardize, sustain) to organize the workspace and make materials more accessible. And provide workers with the right training and tools to minimize unnecessary movements.

Another way to address motion waste is to use technology like automation or robotics that can simplify the process and eliminate manual labor. For example, an automated system can bring the item to them instead of having an employee walk across the warehouse to get a specific item.

7. Defects Waste: Errors and Rework

Bad processing leads to bad products and services, mistakes, and rework. That always means higher inventory, inspection, product design, and processes.

Mistakes always waste time, resources, and potential rework. They can also damage your reputation and customers.

What are your business processes’ biggest reasons for defects in products or services? How can you ensure your work processes will work with zero defects?

Quality control, proper employee training, and a system for finding and fixing errors are ways to reduce defects. Also, involving employees in problem-solving and continuous improvement will help find the root cause of the defect and prevent it from happening again.

More Wastes You Need to Consider

8. Unused Employee Creativity

Jeffrey Liker introduces eight category of wastes. It is unused employee creativity. Today, creativity is one of the most significant potentials of any company despite its kind of business. Creativity leads to creative problem-solving, improvements, change, etc. This is an essential competitive advantage for any company. A higher creativity level means a higher business potential energy for the company.

9. Environmental Trends Lost Opportunity

As the ninth group of wastes, some authors talk about environmental trends as a lost opportunity for the company to join the environmental trends that provide significant savings.

For example, using solar energy instead of electric energy to warm water is a part of the efficient production process. It is a significant saving for each company. Review all those costs that don’t add value related to environmental trends. If you succeed in cutting these wastes, your company will become a “green company.” It will save a large amount of money that will directly affect the price of the product or service.

10. Unnecessary Communication

As the tenth group of possible wastes, I am usually talking about unnecessary communication. These wastes emerged as inevitable, mainly because today’s work is largely based on communication. Here, I think about unnecessary meetings, chats, emails, etc. Reducing waste in communication can drastically improve today’s way of doing work.

A study by McKinsey Global Institute published in July 2012 titled “Social Economy” says that employees with some interactive work spend 28% of their workweek on managing email. A logical question that follows is whether this time from 11 hours a week (if you consider the 40-hour workweek) serves to create and deliver value for customers.

Related: Time Management Tips for Your Entrepreneurial Journey

11. Over-engineering

Some authors also speak about over-engineering that is well-known and many times integral part in the IT industry and especially software development. It is when a product or system is made more complex than necessary, resulting in unnecessary costs and time spent on development. This can happen due to various reasons such as trying to future-proof the product, incorporating too many features, or not fully understanding the customer’s needs.

How to Eliminate Waste in the Workplace

First, you must find all the waste, analyze it, and work on improvements to reduce or eliminate it.

You can use Value Stream Mapping (VSM) to identify waste. This visual tool will help you to see how much time and resources your organization is spending on each task in your process. With the help of VSM, you will find possible areas of excessive waiting, rework, or unnecessary movement of materials or information.

When you have found all the waste, the lean manufacturing approach requires a deep dive into the root cause of each waste and developing a plan to eliminate it. You can use a fishbone diagram or Ishikawa diagram to break down the reasons for identified wastes so you can easily find the solution.

Finally, you must implement a waste reduction plan that contains action steps such as redesigning the process, introducing new technology or equipment, continuously monitoring and measuring the process to make further improvements, etc.

Remember that today, using a software solution is essential for effectively measuring and reporting waste elimination outcomes, leading to cost reduction improvements, time to market, customer satisfaction, and overall profitability.

By continuously finding and eliminating waste, you will improve your process, which will result in cost savings and better products.