Saturday, January 30, 2010

Seven wastes|Waste of Defects

In my previous post on how to implement lean manufacturing I discussed the seven wastes, within this post I will discuss the most obvious of wastes, that of defects. By most obvious, I mean that when most people think of waste they generally only think of product or services that are defective.

What is a defect? Well a defect is any product or service that has failed to meet the customer requirements, whether you are talking about the customer as being the final end user or the next step in the process.

We have defects in what we do for a number of reasons, and many people and companies turn a blind eye to defects as they are used to it. How many manufacturing companies accept product from their suppliers that the operators then have to tweak to make it fit into the process? How many times a day do you personally tweak or repair something to let yourself progress in your work without going back to the owner of the defect? We live in a world full of defects in one way or another and we are programmed to just accept it. DON’T.

Defects cost more than you think, the cost of a split widget in the manufacturing process is not just the material cost of that widget and the cost of labour to get it there. The cost of defects is often described as an iceberg, just a small part of which is floating above the surface.

When you are learning how to implement lean manufacturing you need to be aware of what is laying beneath the surface of the water. Defects have many hidden costs, these include rescheduling costs to replace defective product, excessive inventory, reduction in capacity, longer lead times, rework, scrap and concessions, paperwork, complaints and potential lost business. The list could go on and on, typically the true cost of a defect is 10 times the initial cost.

What causes defects, well there are many things that could cause them. Typically they are caused by unclear operating procedures and poor specifications. Normally due to a lack of training, shortage of skills or even down to just a plain old fashion operator error.

In the past many companies tried to find defects through the use of quality control. They had inspectors and testing to try to find defects and remove them from the process. Many companies still use these quality control inspectors. But this is not how to implement lean manufacturing, we want to eliminate the waste of defects not just find them. At the end of the day the inspector is just an additional cost within the company, what he is doing is not adding any value to the product and is all waste.

Most companies now have “seen the light” and look at quality assurance, assuring the quality of the product by putting in place processes and specifications to prevent the production of defects rather than trying to find them after the event. However in my experience the beaurocracy that they put in place can be excessive and unnecessary.

When learning how to implement lean manufacturing we need to ensure that our processes do not produce defects through improving the reliability of processes through things like total productive maintenance (TPM) and using techniques such as Poka Yoke (mistake proofing). Look for the waste in your processes and eliminate the waste of defects. More on these techniques and how to implement them in later posts. The following link will enable you to go back to the description of all wastes to enable waste elimination.

Seven Wastes|Muda|Waste Reduction|Waste Elimination

If you are going to understand how to implement lean manufacturing then you need to understand the concept of waste or as the Japanese would call it; muda. One of the most obvious concepts of lean is waste reduction or waste elimination to become more efficient. Any waste is normally categorized as being one of “The Seven Wastes”, although some have increased this to eight or more by including the likes of “wasted talent”. I will talk at greater length about the individual 7 wastes later.

Most people when they begin to learn how to implement lean manufacturing base their learning around the Toyota Production System, as this is where most of our lean manufacturing comes from. How does Toyota define waste; “anything other than the minimum amount of equipment, materials, parts, and working time absolutely essential to production.” Another alternative could be that of Hay; “anything other than the absolute minimum resource of materials, machines and manpower required to add value to the product.”

Seems an OK definition I hear you say, but; what is “absolute minimum required”? The above statements are subjective therefore a weak basis for agreement. One persons bare minimum is too low for some and too high for others. We need to have a better definition if we are going to be successful when we learn how to implement lean manufacturing.

Let us think about “work”, there are two aspects to any work effort that we do, that which adds value and that that does not. What is value? Value could be defined as an explicit customer requirement, if what you are doing is not meeting this explicit customer requirement then it is not adding value to the product or service. Non value adding work costs you time and money and does provide anything that the customer requires.

So what may be a better definition of waste? Something is waste if it “does not meet an explicit customer requirement” and if it cannot be shown to be performed more economically. I think this is a better definition, feel free to argue with me and give a better definition if you like.

So how much waste is out there? I am sure that you spend most of your day working hard, but sit back now and think about the above definition. How much of what you do is meeting an explicit customer requirement? What could be done more efficiently? Studies show that most people spend less than 5% of their time adding value!

Many people would dispute this, but just think about the definition and what you do in the day. Break every action down and think if it is meeting a customer requirement that you are paid for? After all the customer is only paying for the product or service that he wants.

So what are the seven wastes; defects, processing times, inventory, overproduction, waiting time, transportation, and motion. To this list an eight waste is often added, that of untapped human resources or waste of talent. In addition to this in today’s age of environmental awareness we also often add the wastes of energy and by-products.

The following links will take you to each of the relevant wastes;

Waste of Defects
Waste of Waiting Part 1
Waste of Waiting Part 2
Waste of Motion
Waste of Transportation
Waste of over processing
Waste of over production
Waste of Inventory
Waste of talent
Waste of Energy
Waste of By Products

When you learn how to implement lean manufacturing these seven wastes are an important part of that learning. If you want to be able to eliminate waste or go about waste reduction then you need to be able to recognise it for what it is. Each waste deserves detailed descriptions so I will deal with each one as separate postings.

Thursday, January 21, 2010

How to implement Lean Manufacturing

If you are reading this then you are obviously interested in learning how to implement lean manufacturing within your own company. Maybe you have already dabbled in lean to become a more successful and more efficient organisation, maybe you have tried to implement the techniques within a service company, maybe you are completely new to this. I hope to help you over the coming posts to learn how to implement the best and most relevant techniques. Implementing Lean Manufacturing techniques is not rocket science and anyone with a firm grasp of common sense can do it.


Lean Manufacturing is a philiosphy as well as a collection of tools to help drive business improvement. It is about producing what the Customer wants, when the Customer wants it using the minimum amount of resouce required.

For example, if you wanted to bake a fresh cake for your children, would you open a large sack of flour and other ingredients? Would you then have a staff of several people each doing a seperate task in the kitchen, weighing, mixing, whisking, etc? Would you then put a large batch of cakes in an industrial sized oven to cook? Then present your children with their one fresh cake and then store the remainder of the batch for a later date. I am sure the children would enjoy their cake, with all the added preservatives that were required to store the remaining batch, and will consume the remaining batch, even if they later want chocolate cake but the stored cake is vanila! It is also a pity that they actualy wanted to have their dinner cooked but the kitchen was being utilised cooking a large batch of cakes.

The above would be stupid wouldn't it! But that is exactly what many businesses do with their products. They overproduce and store product that is not needed whilst being unable to produce what the customer wants today.

How to implement lean manufacturing on this process? Well most of you already know the answer, you open a packet of ready mix which contains exactly the right amount of ingredients, mix it yourself to the instructions, then place it in your normal sized family oven (or even into your much smaller microwave oven which nowadays doubles as a small conventional oven to save energy) and 20 minutes later your children have their cake, and tomorrow you open the chocolate ready mix cake.

Am I oversimplifying the situation with the above example, I would say not, many of the companies that I have visited are very much like above. They have excessive lead times and fail to deliver on time as their production equipment is tied up manufacturing what the customer wants next month, not now. Their excuse is that they have to do it like this to be able to produce ecconomicaly, it takes too long to change over the machinery to a different product and so on. They must learn how to implement lean manufacturing, they must concentrate on being able to only produce what the customer wants when they want it with the minimum amount of resource. The minimum amount of resource almost arrives as a given when you try to achieve only producing what the customer wants when he wants it.

A lean practitionar would call this JUST IN TIME (JIT) manufacturing and is one of the most important aspects of how to implement lean manufacturing. The ideal for any process would be one that could produce a batch of just one item on demand. This is thought to be impossible within many industries, but with just a little thought anything is possible, especially as technology improves every day. Imagine printing books, the process involves huge printing machines set up to produce vast batches of the same book, this results often in large quantities being pulped as unsold or being sold at greatly reduced prices in discount book stores. What would happen if you could walk into a book store, browse a screen showing all the available books then just select the one you want and a few minutes later it was printed, bound and handed to you without waste... impossible? No, it is already being done in a number of large bookstores! This is how to implement lean manufacturing!

So, do you want to have a company that competes on trying to have the lowest price through trying to run large unecconomical batches. Unable to be flexible when the customer wants to order something for tomorrow, but the lines are set up for something else. A company that has to scrap hundreds of products in the warehouse because the model became obsolete before you could sell them. A company that watches their business disappear overseas to China, India, Africa, etc. Or do you want to be a company that can ecconomicaly make just what the customer wants to today, be flexible enough to give it to them when they want and still be able to compete on price due to minimising your wastes? If so you need to learn how to implement lean manufacturing.

If you read this how to implement lean manufacturing blog you will learn over the coming posts what the relevant tools are within lean manufacturing, how they interlate with each other and how to actualy use them. Not from some university know-it-all or some big headed manufacturing guy who has done it once but from someone who has successfully run over a hundred projects both as an employee and as a consultant across many industries.