When you walk through your workplace do you find it hard to see waste? Maybe you have implemented 5S so the workplace looks well organized and have a solid order backlog so that everyone seems really busy. In this environment you may look at your operation and think that the opportunity to improve is now limited. This situation may be superficially satisfying, but can also be quite frightening if your margins are under pressure. So where do you look for hidden waste when your workplace already “looks” efficient? The best answer is to revisit your value streams and systematically identify and eliminate waste. However a walking through of your operation may show up some surprising examples of hidden waste in your operation.
Take some time to just stand in a discrete position in the workplace and observe what everyone is doing. Count how many people that you can see and then count how many of those are actually adding value for the customer while you are watching. For example do your operators leave the line to look for materials? Are there non-value-adding processes? For example do you pack your product at one stage of the process only to unpack it at a later stage? Does product get moved long distances or get put into warehouses to be removed and used again later in the process? The time taken moving stock around and tracking it can be significant and does not add any value to the customer.
Another common source of waste and cost is waiting for machines. The cash you have invested in your machines has already been spent, whereas the cost of labour is ongoing. Therefore if your operators are standing waiting for machines to finish their cycle your machine efficiency might look great, but your profit statement will not be so good. Design machines to operate automatically or at least have automatic ejection of parts and make sure that your “standard work” has the operator arriving at the machine just after the machine cycle has completed, not just before.
Inventory is waste, because the customer does not pay you more for your products when you have more inventory (unless you are in the warehousing business!!). However inventory also hides waste. If inventory is building up at points on your assembly line this is a sure sign that the work on the line is unbalanced. Inventory will build up behind a bottleneck. Processes upstream of the bottleneck will have their output restricted by the bottleneck and therefore will often have waste built into their work. This can manifest itself by short wait times while the upstream operators wait for the downstream operators to catch up. Inventory can also hide problems, for example unreliable equipment or long setup times. All of these factors contribute to more waste and inflexibility in your supply chain.
Stick your head in the waste bin and see what is in there. It can often be surprising. In some processes end of run production is just thrown away when it will not fit on the pallet. Often in-process quality issues go unreported and the affected product is quietly thrown away. Alternatively setups can be a source of large amounts of startup waste. Material is usually your largest cost, so using structured problem solving techniques to find the root cause of why product ends up in the bin can have a large impact on profit. Also take note of the amount of packaging in the bin. Again you will probably be staggered by how much packaging is used for the materials you use. Packaging cost will be built into the cost of the product you buy, and, as well, the removal, handling and disposal of waste packaging in your plant can be a significant source of waste. Investigate reducing packaging or using returnable packaging—you will help the environment and reduce cost and waste.
These are just a few areas where you can look for waste, but they will provide you a start. Then take a structured approach to identifying and eliminating waste by using Value Stream Mapping and Standard Work Analysis to quantify waste and develop future state action plans to eliminate it.