Eight Wastes and Five Principles of Lean
Lean has its roots in manufacturing, specifically Toyota's car manufacturing process. It was created by Taiichi Ohno, Toyota's Chief engineer who created the Toyota Production System which inspired lean manufacturing. In studying lean, I've learned that the principles of lean can be applied outside the manufacturing environment and into anything that can be described as a process.
In this post, I'lll explain two foundational concepts of lean to get you started and hopefully inspire you to study lean in depth on your own.
Eight forms of waste
I was first introduced to Lean management back in graduate school. Reflecting back, all these years I remember the key take-away from the lessons was the concept of waste and eliminating it. Researching for this blog, I went back into Womack and Jones Lean Thinking book and there it was: muda.
Muda means waste and the thesis of Womack and Jones' book is that lean thinking solves the problem of waste in your organization. Although there are lean principles and tools and techniques to implement these principles, have to understand waste first.
Waste is anything that doesn't add value and Ohno developed the following list of seven forms of waste:
- Overproduction - of widgets (too many) ahead of demand
- Waiting - of employees for the next processing step
- Unnecessary transport - of materials between activities or locations
- Unnecessary motion - of employees as they do their work
- Overprocessing - of parts due to poor tool and product design
- Inventories - of widgets or parts as they wait for the next step (another form of waiting)
- Defects - of parts widgets and parts
An eighth was added by Womack and Jones in their book Lean Thinking:
- Overdesign - of widgets for features that the customer does not want.
Knowing these forms of waste is foundational to your expertise in lean. Once you are able to see these kinds of waste, you'll be able to categorize activities into three different types, two of which are a type of waste.
Two types of waste
Related to the eight forms of waste is a typology of activities. One of the principles in lean is to map out the value stream of your process which requires laying out the activities of your process. When you do this, activities can be categorized in three ways:
- Activities that add value to the customer
- Activities that do not add value (muda) and are required as part of processes internal to the company or rules or laws that the company has to follow (Type I muda)
- Activities that do not add value (muda) and are not required so can be eliminated right away (Type II muda)
If an activity adds value to the customer, great! Keep that step and look for waste in other activities. If an activity is categorized as Type II muda, that's also good. Type II waste is easy to eliminate because it is not required.
Eliminating Type I muda is where the principles, tools, techniques and a culture of lean transforms these activities to the most efficient as possible or even transforming the muda into value.
Five lean principles
Once you can see waste, lean thinking is the method that can make your organization the most efficient and effective it can be. Although there are specific tools and techniques used to implement lean, I'll talk about the five broad principles here. These are listed in order:
- Define value. Everything in lean starts here; and it starts with understanding value from the customer's perspective. An activity or product has value if a customer is willing to pay for it.
- Map the value stream. This second principle lays out the company's activities in their different product and/or service lines. In the process of creating these maps, the team identifies and removes waste, keeps value-added activities, and redesigns the company's systems to create a lean organization. I've written two different blog posts on this topic: Tips on being a facilitator and five mistakes to avoid.
- Create flow. This principle is about creating systems that ensure smooth operations of the remaining value-added activities throughout the system. Processes in flow states are the most efficient because there is zero time wasted on interruptions or delays. Warning: Creating flow will require rearrangement of your mental models and may require significant reorganization throughout the company.
- Establish pull. This next principles follows the flow creation principle because companies will find that they will dramatically reduce their process times. As activities require more raw stock, a natural reaction might be to create large stockpiles of these materials in order to keep up with demand. Establishing pull is counterintuitive because it requires maintaining as small a stock as possible and working with "downstream" activities to ensure these activities keep up with demand. Establishing pull is related to creating flow because the intent of pulling materials is that the material "flows" through the production system.
- Pursue perfection. This is the final principle of lean which encourages (or requires) creating a culture of continuous process improvement and lean thinking. Although the first four principles in this list will achieve initial performance gains, this final principle ensures that these achievements are sustained for the long term. Pursuing perfection is not only about continuous process improvement; it encourages constant employee self-improvement and a company to transform into a a learning organization.
For every blog I post, I try to put the most helpful resources I can in order to further your own education. For this blog, I've just scratched the surface of the topic. So all of the resources below are the foundational books that I've used over the years in my own lean journey. (As I put this resource list together, I see that The Toyota Way recently republished and so I'll have to pick up a copy for myself!)
- Lean Thinking: Banish Waste and Create Wealth in Your Corporation by Womack and Jones(2003) Amazon link
- The Machine that Changed the World: The Story of Lean Production - Toyota's Secret Weapon in the Global Car Wars That is Now Revolutionizing World Industry by Womack, Jones, and Roos (2007) Amazon link
- Value Stream Mapping: How to Visualize Work and Align Leadership for Organizational Transformation by Martin and Osterling (2013) Amazon link
- The Toyota Way, Second Edition: 14 Management Principles from the World's Greatest Manufacturer by Liker (2020) Amazon link
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