The lean methodology has transformed business, design, engineering, and manufacturing organizations around the world. And they all have an automaker to thank for it.
Back in the 1950s, before it became known around the world as an automotive giant, Toyota was on the verge of bankruptcy, producing just a few thousand cars a year for the small Japanese market.
After engineers studied a Ford factory in the United States, they set out to create a new form of mass production that would allow them to scale up, even as they minimized the waste they saw in Ford’s operation. After years of research and experimentation, they came up with the Toyota Production System.
One of the project’s biggest undertakings was identifying seven types of waste at Toyota’s plant. Thankfully for business owners, Taiichi Ohno, the engineer in charge of the project, sought to create a universal understanding of waste that would not only apply to the processes at Toyota’s factory but to every type of industry. These seven forms of lean waste are still relevant to businesses today.
The seven forms of lean waste
At its core, lean maximizes value for customers while cutting all forms of waste. But some waste is unavoidable if you want to get tasks done to a certain standard of quality. Lean waste is differentiated into two categories:
- Necessary waste doesn’t add value but is necessary to achieve results or maintain quality. Examples include planning, reporting, and testing.
- Pure waste doesn’t add value and is completely unnecessary.
These are the seven forms of pure waste.
One of the biggest problems manufacturers face is customers who are unwilling to pay for their products. This is usually the result of a lack of market demand. Producing a high volume of goods is one of the most effective ways manufacturers can reduce cost per unit and maximize profits. Unfortunately, doing this is a bit of a gamble. If the market changes — or was never optimal to begin with — the company is forced to sell their work for even less.
In the lean methodology, companies only produce what they need, when they need it. Kanban systems (a popular tool in lean) establish automated signals that tell manufacturers when it’s time to make more of a certain product to replenish the stock for sale. Generally, manufacturers don’t make anything unless there’s an almost guaranteed buyer.
Whenever work isn’t in progress, people are waiting. In manufacturing, waiting ensues when machines aren’t moving. In business settings, waiting can occur whenever someone needs an executive to approve a document or workers need managerial direction on a project.
The lean methodology uses a pull system to ensure that work flows steadily at all times and is neither overwhelming nor underproductive. Many companies also draft standardized work protocols so workers follow specific procedures for every task. These are often on a timetable, making it easier to schedule work.
Transportation waste is similar to waiting, as it happens whenever materials are in transit without adding value to the product or customers. This is common in manufacturing when goods move between factories.
Lean prevents transportation waste through a process known as value stream mapping, in which managers design a linear, sequential workflow.
Motion waste is the result of employees and machinery making unnecessary movements, such as when workers walk long distances between equipment and workstations or they suffer injuries from bad ergonomics.
Similar to handling transportation issues, the value stream mapping process helps managers establish an efficient system and workflow to prevent motion waste.
When workers do more work without adding value or by delivering too much value, they overprocess. Examples of this include adding features to software that no one uses, even though developing the feature increases production costs.
Lean thinking prevents overprocessing by encouraging managers to compare customer requirements to current manufacturing processes. The value stream map also presents opportunities to review processes and further refine them to save resources.
Inventory waste is usually associated with overproduction — when the company produces more than it can realistically sell. In retail situations, this creates overstocked shelves. Otherwise, these excessive items require storage, which further wastes space that the company could put to productive use.
Lean counteracts inventory waste by promoting production of items on an as-needed basis, so there’s never a glut or shortage of available items.
Defect waste carries a wide array of consequences. Most notably, defects lead to material waste if they’re significant enough to scrap a finished piece entirely. Otherwise, the additional reworking needed to improve quality wastes valuable production time.
Lean prevents defects by encouraging managers to look deeply at their value stream for potential issues during manufacturing. If any defects occur, the map makes it easier to determine what caused the issue, allowing teams to quickly change their processes.
Addressing the seven types of lean waste — like what Ohno identified for Toyota in the 1950s — remains vital to every company using lean today. Thankfully, it’s easy to do with tools like JotForm, which allows you to customize forms with widgets and integrations to track inventory and other types of lean waste.
By working diligently to eliminate or reduce lean waste, you’re also preventing another kind of waste — the waste of human potential. The amount of time available to each of us is limited, and the more streamlined our operations, the more time we have to go further than we did before.