Taiichi Ohno defined the seven biggest sources of waste as an engineer at Toyota more than 40 years ago. These wastes were responsible be for the majority of issues that arose in the business. These wastes still cause time, money, and resources to be used poorly today.
When it’s time to increase margins, lower costs, remove unnecessary steps, or take on any project aimed at making a business better, these are often the best starting sources.
- Overproduction- Producing more than is needed or can be handled by downstream processes
- Inventory- Similar to above, producing more than is necessary only to have it sit on shelves, unused. Excess inventory ties up cash, hides defects, and runs the risk of becoming obsolete.
- Waiting- Exactly what it sounds like. If items or information get stuck in a bottleneck, they create waste. When a person or machine has items stuck in the backlog, just waiting to be worked on, there is waste
- Motion- Specifically, unnecessary motion. Moving items from storage to one machine back to storage then to another machine, etc. Information and products alike should flow seamlessly to customer.
- Transportation- Movement outside the production facility. Think of a product going from the manufacturing plant to regional distribution center to local distribution center, then to a users house. Keeping the supply chain in check and delivery directly (when possible) is a key to minimizing waste. (Transport cannot go to zero- there will always be some. Minimizing it is key)
- Rework- Fixing mistakes made the first time
- Over processing- Adding unnecessary steps in the process, or taking on work that is not required.
The more waste that can be removed from a system, the more time, money and resources can be applied to the right work.