Skill Level Appropriate for all
- Every operations manager wants to trim the fat from their supply chain. Well, Toyota gets credit for creating a whole manufacturing philosophy called lean that's focused on just that: improving efficiency by eliminating waste from their processes. In this video, we'll go over the eight different kinds of waste that lean experts look for and that you can use to drive improvement in your own operations. The easiest way to remember the eight wastes is with the acronym TIM WOODS.
T is for transportation. Moving people, products, or information from one place to another adds time and cost to your supply chain. When you look for ways to reduce the transportation between steps, you can often speed up a process and lower your costs. I is for inventory. Inventory acts as a buffer to balance the steps in a process, but it costs money, because it ties up your working capital. The more closely you can synchronize all of the steps in your supply chain, the less need you have for inventory.
M is for motion. Every movement that a person or a machine makes consumes both time and energy. Positioning work close together can not only reduce the time required to complete a process. It can also make it easier for the people and reduce the wear and tear on your equipment. W is for waiting. Processes often get stopped because of missing parts or missing instructions, and when one process stops, it can have a cascading effect that causes delays throughout a supply chain.
Identifying and resolving the issues that cause one process to stop can often eliminate wasted time in several downstream steps. And now for the two Os, overproduction and overprocessing. Overproduction is when you make more than what you need right now. The extra inventory costs money, because it ties up working capital. It also takes up space and is susceptible to theft or damage. As a rule, eliminating waste means you should keep everything in its lowest-value state for as long as possible.
Overprocessing is when you make things better than what your customers need or than they'll pay for. You're adding cost without actually creating additional value. That's not to say you should tolerate low quality. It means that you need to understand what your customers' specifications are and then meet those specifications exactly. Next comes D, for defects. If you make a defective product, you've wasted the materials that went into the product and the manufacturing capacity that you used to build it.
When defects go undetected, they travel through a supply chain, consuming more time and eating up more capacity. In other words, defects continue to generate waste until they're stopped, so catching defects early is important, and eliminating them altogether is even better. The last form of waste to watch for is wasted skills. Companies can miss out on opportunities to create value and improve processes simply because they don't leverage the skills that their employees have to offer.
It's easy for people to slip into a routine and overlook waste in an operation, but in today's competitive environment, no company can afford to be complacent. If you'd like to learn more about lean, check out the course Lean Foundations by Steven Brown. With Steven's instruction and a little help from my friend TIM WOODS, you can use the principles of lean to stay vigilant and make a real difference by eliminating the waste in your supply chain.