Lean Tools and Techniques

What is a Value Stream Map?

Value Stream Map
A Value Stream Map helps to understand the waste in your processes and eliminate them.

It is over 20 years since Jim Womack and Dan Jones introduced Value Stream Maps to us in “Lean Thinking”[i] and almost as long since John Shook and Mike Rother taught us how to draw them in “Learning to See”[ii]. Therefore, you would think that the need to answer the question posed by the title of this blog is long past. Surely everyone knows what is a value stream map?

At least you would expect Lean practitioners and Lean consultants to know? Sadly, I find that is not the case and I find all sorts of process maps being described as a value stream map. So, in this blog I want to take you back to basics and describe what is a value stream map.

TXM Article: What is Lean Supply Chain Management

Where Were Value Stream Maps First Created?

Like most elements of Lean, Value Stream Maps originated from the Toyota Production System. At Toyota they were called Material and Information Flow Analysis diagrams (MIFA). It’s worth remembering this as some lean consultants will try and tell you that MIFA Diagrams are different to value stream maps – they are not – they are two names for the same thing. As I understand it from my Toyota friends, MIFA diagrams were not required in the Toyota assembly plants, because assembly lines tend to have built in flow.

However, when the Toyota supplier development teams started working with suppliers they found a diverse range of processes operating. They needed a tool to be able to analyse all these suppliers’ manufacturing processes and understand how they connected to Toyota’s process. Hence MIFA diagrams were developed to show the supplier’s material and information flow and how that connected to Toyota. This then made it easier to diagnose and address problems at the supplier that might impact the Toyota assembly plants.

What About the Name Value Stream Maps?

This name was coined by the team at the Lean Enterprise Institute – Womack, Jones and Shook. It communicated the concept that value stream maps measure the creation of value (and waste) through a business from its suppliers to its customers.

What are the Elements of a Value Stream Map?

To make your process diagram a value stream map and not just a flow chart or (worse) a vaguely related collection of coloured post-it notes on a wall, your value stream map MUST have the following elements:

  • It must map the product flow from receipt of raw materials at the receiving dock through all the value-adding and non-value adding steps in the business until the goods are ready to ship to the customer. You can map beyond that – upstream and downstream of your operation – but the “dock to dock” flow is the minimum.
  • It must map the information flow at least from receipt of the customer order to the preparation of documentation to ship the goods to the customer. Again, you can go further than this and start with the quotation and design processes if you wish.
  • Product flow is typically shown from left to right across the bottom of the process, although the normal way to draw it is to start with the customer (in the top right-hand corner of the map) and work backwards.
  • Information flow is usually drawn from right to left, starting from the customer.
  • The map must include data about what the customer requires in terms of volume, product mix, service level expectations and delivery arrangements.
  • It must include data on the individual processes including value-added and non-value added time, cycle time, change over time, uptime performance or other metrics that characterise the performance of that process.
  • It must highlight the inventory between each step of the process.
  • It must show how processes connect. What is the nature of the flow of product and information from one process to the next.
  • It must show the total lead time for the process and highlight the value-added and non-value added time.

Without all these elements, what you have drawn may look nice and may be useful, but it is not (in my view) a value stream map.

Current state value stream map
Example of a Current State Value Stream Map Showing the Key Elements of the Map

TXM Article: The Top 6 Ways to Engage Suppliers to Improve Your Supply Chain

The Steps in Creating a Value Stream Map

Creating a value stream map is best completed by a small (usually less than 10 people) cross-functional team that represents the key functions involved in the end-to-end flow. In a manufacturing flow, a value stream map team would normally involve production, production planning, purchasing, customer service, sales and supply chain. Other functions such as finance and engineering can be included depending on your structure and business needs.  Value stream map team members need to have a good understanding of the detail of the process, but also include individuals with the authority to make changes to the process.

Once you have formed the team, you need to decide what you are mapping. This is often done using a “product family matrix”. This is a chart that groups your different products according to the steps that they flow through. All the products that flow through the same or similar process steps are grouped together and called a product family. Typically, you will need to complete one value stream map for each product family. The product family matrix would also include customer data such as the volume of products or services sold, product mix, order sizes and service requirements such as lead time.

You also need to define the scope of the value stream. This includes where the value stream will start and finish (usually the minimum is from receiving dock to shipping dock) and what you will include in the information flow. Information flows can become very complex so you may choose to exclude financial processes, quoting, QC processes or engineering processes if you need to. In this case, you would just focus on the information flow required to fulfill orders and control the flow of product and material through the process.

At TXM, we start the mapping process by getting the team together and introducing the concepts of value stream mapping and then developing the outline of the product flow and information flow as it operates now. We call this the current state map. At this session, we would then agree with what data we need on the individual processes and the overall flow to complete the current state map. We would assign individuals the responsibility to gather this data.

We then give the team some time (usually one to two weeks) to gather this data.

When we get the team together again to complete the current state map by adding in the process data and calculating the overall metrics for the value stream, especially the lead time. If necessary, it is possible to overlay other metrics on the value stream such as cost, quality and on-time in-full delivery performance at each step.

Improving Your Value Stream

Once you have completed the current state map, the next step is to work out how you can improve your value stream. This is called the future state map. Creating the future state map involves several steps and I won’t explain them in detail here, but they include:

  • Calculating the rate of customer demand or takt time.
  • Determining the finished goods strategy.
  • Working out if you can eliminate processes or combine multiple processes together into a single process with a one-piece flow.
  • Where you cannot combine processes working out how they can be connected.
  • Determining the point that will be the pacemaker for your process.
  • Determining the pitch or planning interval for your process.
  • Calculating the overall metrics for your value stream map including the new lead time, inventory levels and the performance level that needs to be achieved at each process.

As you develop your future state map you will highlight several changes that need to be made to your process. You will also highlight areas where process performance needs to be improved if you are to achieve the future state map goals. These changes and improvements need to be captured. Aim for a future state that can be implemented in 6-9 months. This means that changes that involve massive capital investment, major IT changes or new technology that has not been developed yet, probably need to be left for a future value stream.

future state value stream map
A Future State Value Stream Map of the Process Shown Above

Finally. you need to develop an action plan to determine how your future state map will be implemented. This will include the timing and resourcing of all the improvements and changes you highlighted in the future state map.

Once you have implemented your future state map, it becomes your new current state map and the improvement process starts again.

TXM Article: Using Fishbone Diagrams to Solve Problems

Common Mistakes

I see some common mistakes made in creating value stream maps. These can eliminate many of the benefits of developing value stream maps. These include:

  • Not going from dock to dock: The real value of a value stream map is that you map your end to end flow, cutting across organisational boundaries. This is how your customer experiences your business. Often, I see attempts to value stream map “departments” within a business. However, waste usually sits at the interfaces between departments and optimising one department can often create waste in other parts of the flow. It might be easier and avoid corporate politics just to map your own area, but it is probably a waste of time and denies you the main benefits of value stream mapping.
  • Failing to define processes correctly: A process starts and stops when the flow stops. This usually means that information or a decision is required before the flow of value can continue. As a result, a single process can include many tasks, provided that, once the sequence of tasks is completed, it can continue without the need for further instruction or information. For example, an assembly line is usually only one process on a value stream map even though it might include dozens or hundreds of tasks performed by many people. This is because once a product starts on the assembly line it will continue all the way through the line without the need for further information or instruction. Likewise, a relatively minor single task can be a process if it breaks the flow. For example, a QC check may break the flow if the product cannot move onwards until QC approval is given.
  • Mixing up Line Balance Charts and Value Stream Maps: Some people will say they value stream map a single work cell. For the same reason as I explain in my comments about not going dock to dock, a map of a single work cell is not a value stream map. More likely it will be a line balance (yamazumi) chart that is used to balance the work in that work cell and standard work sheets to define the timing, sequence, content and outcomes of the work in that work cell.
  • Using Incorrect Information in the Current State: In the world of IT we say, “garbage in garbage out”. The same applies for value stream maps. If you make guesses about what your process metrics are, what your customer needs are or poorly define your value stream map boundaries you will end up with a current state map that does not reflect reality or is incomplete. Then when you go to create your future state, you are likely to come up with recommendations that cannot be implemented or are not optimal.
  • Narrowing the Scope Too Much: You want your value stream map to have a significant impact on your business and therefore I suggest using the product family matrix method described above to define broad product families. Choose the product family that has the most impact on your business to map first. It is much easier to adjust the flow of minor products to fit around your major products than visa-versa. There is a school of thought that you should choose just one product to map. I think this approach is neither necessary or effective. Usually a single product is only a small proportion of your total operation. As well, you are likely to find that the changes you want to make for that product cannot be implemented because of the impact on other products.
  • “Brainstorming” to Develop the Future State: On the face of it this seems like a good way to go. Ask round the table, get everyone to write up ideas or mind map your way to a future state. The problem with this is that it is usually a recipe for more of the same. Participants will most likely push the agendas they have always pushed and the ideas will be constrained by the current state of knowledge. It is a good idea to get the team to highlight obvious improvements when the current state is complete. However, creating a true future state is a structured, step by step process as I describe above. Following those steps will take your team outside its comfort zone, help to neutralise political agendas and most likely lead to an outcome that is much better than anyone in the team expected.

TXM Article: What Makes a Great Supply Chain Manager

Learn More

There are many books on value stream mapping. My recommendation is the best place to start is with “Learning to See”iiby John Shook. This is a very clear, step by step guide to creating a value stream map. If you are a manufacturer, then I highly recommend that you buy the other books in the series including “Creating Continuous Flow”[iii], “Creating Level Pull”[iv] and “Making Materials Flow”[v]. With these four books you really have the tools to create an excellent future state for your business.

If you are in an office environment, I highly recommend “The Complete Lean Enterprise: Value Stream Mapping for Office and Services”[vi]. Again, like Learning to See, this is a very practical, step by step guide to mapping office processes.

If you want something more in-depth for more complex value streams, try “Creating Mixed Model Value Streams: Practical Lean Techniques for Building to Demand”[vii] by Kevin Duggan.

Finally, for an overview of how value stream mapping fits in to the context of your supply chain or small and medium sized business, I cannot help but recommend my own books, “Grow Your Factory, Grow your Profits”[viii] and “On Time In Full”[ix]. Both books provide you insights and case studies about value stream mapping as well as recommendations for further reading.

Do You Need a Consultant or External Facilitator?

In theory, you don’t. Value Stream Mapping is a relatively simple technique and the books I have mentioned I have suggested explain it well. However, there are several benefits of getting outside help. Firstly, value stream maps inevitably cut across multiple organisational boundaries. Achieving change across functions can be very hard if you belong to one of those functions. A good external consultant is independent of any function within your business and can challenge leaders in every part of your business to make change and contribute to the future state.

Developing the future state can be challenging, having someone around who has done it before can help your team to be bolder and deliver much greater benefits for your business. At the same time the books tend to offer a limited range of solutions for the future state, whereas a good Lean consultant may have seen dozens of futures states and be able to bring innovative solutions from outside your industry that enable you to make a step change improvement. That said, unfortunately not all Lean “experts” really understand value stream mapping. Therefore, armed with this blog and my recommended reading, make sure that you do challenge them and ensure that they really understand what is a value stream map!

Contact Us to Learn More About Value Stream Mapping

Learn about the TXM Approach to Value Stream Mapping in this Video

Learn How to Overcome the Stumbling Blocks of Value Stream Mapping

Video on the Benefits of Displaying your Value Stream Map in the Workplace

How to Identify the Key Value Streams in Your Business

References

[i] Womack, J. P. and Jones. D.T. 2003. Lean Thinking. Free Press.

[ii] Rother, M. and Shook, J. 2003. Learning to See: Value-stream mapping to create value and eliminate muda. Brookline, MA: Lean Enterprise Institute.

[iii] Rother, M. and Harris, R. Creating Continuous Flow: An Action Guide for Manager, Engineers and Production Associates. Brookline, MA: Lean Enterprise Institute, 2001.

[iv] Smalley, Art, Creating Level Pull. Brookline, MA: Lean Enterprise Institute, 2004.

[v] Harris, R., Harris, C. and Wilson, E. 2003.  Making Materials Flow: a lean material-handling guide for operations, production-control, and engineering professionals. Cambridge, MA., Lean Enterprise Institute.

[vi] Keyte, B. and Locher, D. The Complete Lean Enterprise: Value Stream Mapping for Office and Services, Second Edition. New York, Productivity Press, 2016.

[vii] Duggan, K. J. 2002. Creating Mixed Model Value Streams: Practical Lean Techniques for Building to Demand, New York, Productivity Press.

[viii] McLean, T. Grow Your Factory, Grow Your Profits: Lean for Small and Medium Sized Manufacturing Enterprises. New York, Productivity Press, 2014.

[ix] McLean, T.  On Time In Full: Achieving Perfect Delivery with Lean Thinking in Purchasing, Supply Chain and Production Planning. New York, Productivity Press, 2017.

Effectively Using a Skills Matrix to Develop Your Team

As we delve into our Lean journey and begin to develop a culture of continuous improvement, the people issues come up pretty quickly. How we identify the skills needed for our standard tasks and how we train our people up in these skills becomes critical as we develop processes and standard ways of working to optimise our efficiencies and workflow. Effectively using a skills matrix is key to developing your people to meet these new challenges. Here we’ll look at what a skills matrix is, why it’s important and how to use a skills matrix to develop our people.

Example Skills Matrix Photo
Skills Matrix showing employees skill level for each task.

What is a Skills Matrix?

A skills matrix is a visual tool that identifies the key skills needed in each department and then recognises our team members and their level of competency against these skills. A good skills matrix can start the conversation about each person’s confidence with the tasks needed. From here a training plan can be created to cross train your team members, providing job variety and a robust team that can still perform at the same level, even when people are away.

Why is a Skills Matrix Important?

Developing a skill matrix is important as it focuses conversations on how work is completed and the basic skills needed to complete the tasks that contribute to the work in each department. This ties in well with developing standard work. Once the key skills are identified, we can check our current team for their level of competency and use the opportunity to correct any bad habits that have crept in through the “Chinese whispers” method of training, where each person just shows the next person how they do it and it slowly gets modified over time, often losing the critical elements of quality and safety along the way. A skills matrix also helps our new team leaders by clearly indicating who has the skills to carry out a job correctly and whether they are competent to do this unsupervised or if they need assistance. Welcoming new people into a team can be made easier with a skills matrix, as it shows the key tasks completed in the department and gives them an understanding of the way each department works. Plus as new team members are learning new skills, it helps to see that each skill is part of the overall picture. This can reduce frustration and overwhelm by seeing how each smaller part fits into the whole.

Developing a Skills Matrix for Your Team

There are three key steps in developing a skills matrix

1. List Skills or Key Tasks

Preferably with your current team, identify the key skills or tasks need to complete the main range of products made in this department. Of course, we realise that it will depend on a number of factors as to what work is done where, but make the list fairly broad, including the use of key pieces of equipment.

2. Evaluate Your Team Against the 5 Levels

With each person, or as a team if your team is comfortable with this, step through each skill and note the level of competency for each person. None – person hasn’t completed the task or doesn’t need to 1st quarter – being training in skill 2nd quarter – can perform skill with supervision 3rd quarter – able to perform skill without supervision Full – is fully competent and can train others

Skills Matrix legend pic
This legend shows how to rate each workers skill level.

3. Review with Each Person and Put On Display

If you haven’t completed the skills matrix as a team, now take the time to review your evaluation with each person. Let them tell you how they feel they perform each task. Do they feel they need further training? Would they like more training in one or more areas that they don’t currently work in? Use this discussion to get a feel for how each person is feeling about the team and the work. Depending on your company culture, add your new skills matrix to your Visual Management Board. Making it visible helps remind the team where you are and where you are heading. Branach Skills Matrix Photo

Creating a Training Plan

Once the skills matrix is complete, it is time to develop a training plan to start filling in the gaps. As we all know, training takes time and can reduce process efficiency in the short term while the training is taking place and the new person is getting up to speed with the new skill. I can’t emphasise enough the importance of cross-training our teams. We hear time and time again “we don’t have the time for training” and suddenly someone is sick or leaves and the team efficiency is compromised more that if the time was invested in training before the need was at crisis point.

Invest the Time to Train Your Team

And this may be where you need to change your mindset. If you find yourself thinking “what if I train someone and they leave?” Well, what if you don’t train someone and they STAY?!? Are you prepared to put up with the ongoing efficiency compromises by not training your team? When considering what training is needed, note that not all of your team needs to be fully competent and able to train others.

Having more than one person at each of the top two levels is important but having all of your team at the top level will take time, so a reasonable approach is advised. Once the skills gaps and training needed have been identified, help the team allocate the time for training and make sure everyone is clear on how we check on the level of competency. You may need to refer to quality standards or drawings.

Tap into your Learning and Development department, if you have one. Like any good Lean system, ongoing evaluation and review must be built into the skills matrix process. With a relatively stable workload, an annual review will be adequate. Adding new work into the department, or a great change in job type might need a review within the annual plan.

Related Content

TXM Article: Five Tips for Designing an Organisational Structure That Works

TXM Article: How to Create a Visual Management Board

TXM Article: Reviewing Your Skills Matrix – Example  

Read More

As the days are dark and cold, there is nothing like sitting down with a good book to feed your brain and get you ready for the challenging week ahead. Here are four good reads to get you started.

The Lean Strategy

Using Lean to Create Competitive Advantage, Unleash Innovation, and Deliver Sustainable Growth

by Michael Balle, Daniel Jones, Jacques Chaize and Orest Fiume

Lean book strategy

A lean strategy is about gaining a competitive edge by offering better quality products at competitive prices and making a sustainable profit by eliminating waste through engaging employees in discovering deeper ways to think about their own jobs and smarter ways of working together. In its current form, lean has been radically effective, but its true powers have yet to be harnessed.

Lean Strategy harnesses that power and delivers a new way of creating value from lean. Leading lean experts address popular misconceptions about the basics of lean/TPS, showing the true purpose of tools, methods, and attitudes that leverage the intelligence of every employee doing the work. You’ll learn how to think―and then act―differently, tapping the power of every person in your organisation in a disciplined manner that generates unparalleled, sustainable success that is responsive to today’s most pressing challenges

The Work of Management

A Daily Path to Sustainable Improvement

by Jim Lancaster

Lean book management

Jim Lancaster tells an inspiring story; It’s a close-up, candid look at his personal transformation as a leader. It’s also a practical, in-depth, business case study of Lantech’s lean transformation, relapse, and comeback that American manufacturing – and other industries – can use to profitably transform themselves. In his engaging story, Lancaster reveals: Why Lantech, a stellar lean performer for a decade, struggled over time (like many other companies) to sustain gains and improve financial performance. Why 60 to 90 minutes of daily frontline management activities are a CEO’s most important minutes of the day for sustaining and growing their business. 8 steps executives can take to lead experiments to create a bullet-proof, real-time daily management system without expensive consultants. Why daily management requires a major shift in managers’ mindsets and behaviors from giving orders and judging individuals on performance to asking questions and enabling good work by people at lower levels so metrics are routinely met. How daily management and sustainable continuous improvement produces dramatic positive effects on the bottom line. What happens in daily huddles where team members review how well they are sustaining gains and staying on track. How to practice true lean leadership in which “bosses” truly act like coaches — not solving problems for people but asking them what they can to do help. How Lantech ties together all facets of the company in an integrated way (from sales to production). Why it deeply invests in the lean training and practice of every single employee every day.

On Time In Full

Achieving Perfect Delivery with Lean Thinking in purchasing, Supply Chain and Production Planning

by Tim McLean

on-time-in-full-cover (Duplicate)

This book is a practical guide for manufacturers on how to meet a fundamental requirement – how to deliver to the customer the right product in the right quantity at the right time. While the concept of on-time delivery seems deceptively simple, achieving it can be incredibly complex. This book unravels this complexity and provides simple, practical solutions that will enable every manufacturer to delight customers with reliable, consistent on-time supply at a competitive cost. It covers the end-to-end process of delivering an order to the customer, from understanding customer demand and forecasting, through production scheduling, supply of materials and delivery of finished goods.

Grow your Factory, Grow your Profits

Lean for Small and Medium-sized Manufacturing Enterprises

by Tim McLean

grow your factory, grow your profits (Duplicate)

The last 25 years has seen Tim lead and assist over 100 small to medium-sized enterprise (SME) manufacturing operations. This experience has now been condensed in to Grow Your Factory, Grow your Profits: Lean for Small and Medium-Sized Manufacturing Enterprises, a start-to-finish guide on how to run a successful small and medium-sized manufacturing operation.

The book presents case studies, practical examples, illustrations, charts, and pictures from real SME manufacturers to provide straightforward solutions to the issues facing every growing manufacturing business. In the book, Tim McLean explains about recruiting the right people, empowering them and many more elements key to getting you up and running with your Lean improvement to meet your needs and grow your business.

The book details how SMEs differ from large organisations and why the approach to improvement must also be different. Covering the complete life cycle of small and medium-sized manufacturers, the book addresses a different SME manufacturing issue in each chapter. This enables readers to tackle issues at their own pace and in their own order of priority.

Grow Your Factory, Grow Your Profits is essential reading for owners, managers, and operational leaders in the 90 percent of manufacturing enterprises that are small or medium sized.

Stop, Start, Continue Feedback Examples

A strong component of TXMs Lean Philosophy is about engaging our team and get them thinking about improving our company, together. Identifying wastes is a great way to start and using simple feedback tools can help get our team warmed up and into thinking mode. Today we will look at the Stop – Start – Continue model.

What is Stop Start Continue?

The Stop-Start-continue model is a simple approach to gathering feedback from our team and get them to start thinking about their work environment and what needs to b done to improve their jobs. The model has been credited to Brigham Young University’s Phil Daniels, psychology professor. It can be used with different aims in mind; for personal reflection , for performance feedback or for team feedback. It can easily ba adapted to work in a lean environment

How do I use Stop Start Continue?

While its application may vary, the basic approach is the same; ask yourself and your team the three key questions

Stop feedback lean tool

STOP – what can we STOP doing?

Consider activities that no longer help us. This may be because the company has grown or is developing a culture we don’t like, amongst many other reasons why we would want to consider what we need to stop doing.

Examples of Stop

  • being quick to blame when something goes wrong
  • expecting others to clean up after you

Start feedback tool

Start – what can we START doing?

This may be the opposite of the STOP notes or bringing in something new, that would help improve the work environment or improve efficiency.

Examples of Start

  • keeping the kitchen clean (always an interesting discussion point and often a reflection of company culture)
  • completing the paperwork when started
  • holding team meetings
  • sharing more information about the company and long term outlook
  • celebrating when things go well

continue

Continue – what can we CONTINUE to build on?

Already doing some good stuff? Excellent! Let the team identify this and build on it for continuous improvement.

Examples of Continue

Alternative approaches to Stop-Start-Continue

Depending our your team’s continuous improvement maturity, there are a few different approaches for seeking feedback:

a. brainstorm session – good for immediate interaction; a challenge over shifts

b. board available for team to access – helps draw out quieter team members

Consider building a feedback model into your regular CI meetings. By creating a routine around asking for feedback, our team can note issues or ideas as they arise and know they have a place to present them back to the team. If you are facilitating the feedback session, keep the team dynamics in mind; establishing group rules about listening and respect can set clear expectations and be referred back to if the “boys club” begin to act up during a feedback session.

Learn More with TXM

TXM has been helping companies achieve Operational Excellence since 2004. We have a proven track record of helping our customers improve their bottom line by implementing Continuous Improvement and Lean methodologies. Our team of experts have helped hundreds of companies across a wide range of industries improve their performance, and we are confident that we can help your company achieve its full potential. Contact us today to learn more about how we can help you achieve Operational Excellence.

In every manufacturing process, our aim is to add value to a product that the customer will pay for. While adding value to our products, there are tasks that must be done to complete the work but don’t directly add value; set-ups and inspection, to name a few. Then there are the other activities that occur during production that are waste.

According to Lean Manufacturing principles, waste is anything that creates no value that the customer is willing to pay for. Waste is defined in terms of value therefore we can only know the waste by first knowing the value first. Waste, therefore, is relative to the customers’ needs.

How Do We Begin to “See” the Waste in Our Production Systems?

Cartons on Pallets
Knowing where the waste is in your process is a must for any manufacturing business.

We begin to investigate the value-adding steps and cycle times in our process, through a Value Stream Mapping process. Out of this process, we now understand how long the value-adding steps take and the overall lead time it takes to get a part all the way through to the customer.

We realise that there is always a BIG difference between these two times.  The difference between value-adding time and the lead-time time provides us with the opportunity to remove the hidden wastes in the value stream. The difference in times is where we can begin to focus on and discover where wastes are hidden.

The 7 Wastes

The 7 wastes (or Muda) have been defined by Taiichi Ohno, the father of the Toyota Production System, and they have become known as the 7Ws.

The original seven Muda (Wastes) are:

  • Transport (moving products that are not actually required to perform the processing)
  • Inventory (all components, work in progress and the finished product not being processed)
  • Motion (people or equipment moving or walking more than is required to perform the processing)
  • Waiting (waiting for the next production step)
  • Overproduction (production ahead of demand)
  • Over Processing (resulting from poor tool or product design creating activity)
  • Defects (the effort involved in inspecting for and fixing defects)

New call-to-action
In order to remind us of these concepts, Acronyms can be a very effective tool and here a few examples,

An easy way to remember the 7 wastes is TIMWOOD

T: Transportation

I: Inventory

M: Motion

W: Wait

O: Over-processing

O: Over-production/Excess-processing

D: Defects

Another easy way is NOW TIME: It’s now time to eliminate Mudas:

N: Non-Quality

O: Over-production

W: Wait

T: Transportation

I: Inventory

M: Motion

E: Excess-processing

New call-to-action
With the 8 wastes use the acronym DOWNTIME is a useful memory aid.

D: Defects

O: Over-production

W: Waiting

N: Non-utilized  Human Resources/Talent

T: Transportation

I: Inventory

M: Motion

E: Excess Processing

*Note this has now been expanded to include an eighth waste of “Non-utilized  Human Resources/Talent”.

What are the 8 Wastes?

Paint cans
Waste must be identified and removed if you are to make your business as efficient as possible.

  1. Defects – The simplest form of waste is components or products that do not meet the specification.  The Toyota quality achievement came with the switch from Quality Control to Quality Assurance – efforts devoted to getting the process right, rather than inspecting the results.
  2. Over-Production – A key element of JIT was making only the quantity required of any component or product. This is the main challenging point to the Western premise of the Economic Order Quantity (EOQ) upon which MRP system is built on. This defines the fixed ordering costs, built around set-up times, and thus the need to spread these fixed costs over large batches. The Toyota production system moved from long set-ups to Single Minute Exchange of Die (or SMED).
  3. Waiting – Time that is not being used effectively can only be a waste – we are incurring the cost of wages and all the fixed costs of rent, rates, lighting, and heating so we should use every minute of every day productively. The Toyota production system is focused on the reasons why machines or operators are under-utilised and set about addressing them all. Thus we have new tools for preventive maintenance, the creation of flow and the emphasis on takt time.
  4. Transportation Waste – Moving items between areas, buildings or factories incurs a cost, in energy to initiate the movement – such as the petrol absorbed by a forklift truck. However, there is much more than just the accounting costs; the movement brings other costs. Managing a factory with operations spread apart is much more difficult than when the subsequent stages are located in the same work cell adjacent to one another.
  5. Excessive Movement – Separate from the transporting of items is movement. People spending time moving around the plant or cell is equally wasteful. The time a machine operator wastes walking around in order to find a piece of tooling or spanner could be better utilised if we improve housekeeping by locating every needed in a place that is close at hand.
  6. Over Processing – A good example from my own experience relates to surface finishes requirements on the component. The original drawing required a cyclonical grinding to improve the surface finish after turning. When a new CNC machine was installed the required surface finishes could now be achieved with a finished path of the new lathe.  Thus the grinding operation was removed. A basic principle of the TPS is doing only what is needed.
  7. Excess Inventory – Now everyone understands that a key element of the Toyota production system is that a JIT production system reduces the cost of inventory. By lowering the inventory we can then see the problems in resupplying the inventory in short lead times. Thus lean is a continual process of improvement.
  8. The eighth waste – Non-utilized Human Resources/Talent – The waste of not using people to the best of their unique abilities. How can we involve everyone in developing ideas to generate improvements and new products?

Now you have an understanding of the 8 Wastes and how to identify them you can start to learn about Value Stream Maps and how to create your own Value Stream Maps to identify where the wastes in your processes. Value Stream Mapping sessions are some of the most powerful Lean tools you can use to enhance your business, it’s people and process.

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