Identification of Waste WASTE Input (Resources) Energy People Capital Water Materials Tools Output Products Services WASTE Transformation

Purpose of Waste Educate supplier of the evils of waste – What – Where – Why – Steps to reduce and/or eliminate Show improvement potential that exists Improve the process’s value added content

WASTE Identification of Waste Input (Resources) People Capital Tools Energy Materials Output Products Services WASTE Transformation

Defining Waste Webster:“To consume carelessly” “Squander” “Fail to take advantage” “Uncultivated area” “Junk” “Worthless residue” “Lose energy” “Grow weaker”

Definition of Waste Anything that doesn’t add value to the process Anything that doesn’t help create conformance to the customer’s specifications Anything your customer would be unwilling to pay you to do

Identification and elimination of waste is the central focus of a lean system. It is dependent on the understanding and involvement of all employees. Successful implementation requires all employees be trained to identify and eliminate waste from their work areas. Understanding Waste

Waste exists in all work.... and at all levels in the organization Understanding Waste

Waste: Anything other than the minimum resources Equipment and tooling Direct and indirect labor Material Floor space Energy Absolutely necessary to add value to the product !!

Identification of Waste Types of Waste Inventory Overproduction Correction Material & Information Movement Processing Waiting Motion

WASTE of Inventory Definition:Any supply in excess of customer requirements necessary to produce goods or services just-in-time Root Causes Product complexity Incapable processes Unleveled scheduling Poor market forecast Unbalanced workload Unreliable supplier shipments Inadequate measurement Misunderstood communications Reward system Symptoms Complex tracking systems Extra storage & handling Extra rework / hidden problems Paperwork / documents Stagnated information flow High disposal costs Obsolete material / landfill In-process packaging High utility costs

Your Company Inventory Hides Problems !! Inventory Hides Waste !! Water = Inventory Rocks = Problems (Opportunities) Poor Layout Variation Equipment Downtime Inventory Level Large Lot Sizes Supplier Quality Long Changeover

Why We Want To Reduce Inventory 1) Interest expense associated with working capital: Requirements to produce goods: -People, materials, facility, know-how, customers -An organization + working capital Working Capital = Cash + Inventory + Accts. Receivable - Accts. Payable -Collect faster -Defer payments -Reduce inventory Benefits of reducing inventory in working capital: -Save interest expense -Free up cash for investment 2) The greater the inventory, the greater the handling: Forklifts, bins, containers, indirect labor to move/store inventory Administrative effort and cost to control the inventory (losses, locating and counting)

Why We Want To Reduce Inventory 3) Inventory deteriorates, causing more scrap & rework: Metal rusts Lubricants dry out Materials accumulate dirt 4) Inventory takes up space: Adds cost to heat, light, and insurance Facilities should be used for Value Added activities (i.e., production rather than warehousing) 5) Guiding principles of “lean” manufacturing: Elimination of buffers makes problems surface and forces organization to address and resolve problems. Leads to need for: -Pull systems -Quick die setup -Manufacturing organized by product, rather than process -Good balancing -Multifunctional workers -Preventative maintenance -etc.

Why We Want To Reduce Inventory 6) Reduce scrap / rework. When defect is detected, the entire inventory has to be scrapped, reworked, and/or sorted.

WASTE of Overproduction Definition:Producing more than needed Producing faster than needed Root Causes Just-in-case logic Misuse of automation Long process set-up Unleveled scheduling Unbalanced workload Over engineered equipment/capability Redundant inspections Lack of reuse & recycling Symptoms Excessive raw materials Extra inventory Unnecessary work Excessive floorspace utilized Unbalanced material flow Backups between departments Complex information management Disposal charges Extra waste handling & treatment High utility costs

WASTE of Correction Definition:Inspection and/or repair of a product or service Root Causes Weak process control Questionable quality Lack of error proofing Unbalanced inventory level Deficient planned maintenance Poor product design Customer needs not understood Improper handling Poorly managed waste streams Inadequate training Symptoms Rework, repairs & scrap Added inventory costs Customer returns Loss of customer confidence Loss of business Missed shipments / deliveries Hazardous waste generation Frequent spill cleanups High disposal costs High utility cost WHITE OUT

WASTE of Material & Information Movement Definition:Any material or information movement. Root Causes Mislocated materials Unleveled scheduling Unfavorable facility layout Redundant inspections Poor workplace organization & housekeeping Poorly managed waste streams Unbalanced processes Supply chain management Symptoms Extra handling Extra handling equipment Extra inventory Large storage areas Over-staffing Reduced quality Extra Paperwork Extra hand-offs Transport of disposal Excessive energy consumption Excessive emissions OVERNIGHT DELIVERY

WASTE of Processing Definition:Effort which adds no value to the product or service from the customer’s perspective. Root Causes Product changes without process changes Just-in-case logic Lack of communication Redundant approvals Extra copies, excess information Undefined customer requirements “Stop-gap” measures that become part of the process Lack of reuse / recycling Symptoms Unnecessary work Extra equipment Longer lead time Reduced productivity Extra material movement Sorting, testing, inspection Inappropriate use of resources Excess energy consumption Processing by-products

WASTE of Waiting Definition:Idle time created when people wait for machines, people wait for people, machines wait for people, and machines waiting on machines. Root Causes Unbalanced work load Unplanned maintenance Long process set-up times Misuse of automation Quality problems Unleveled scheduling Ineffective layout Specialization Symptoms Under-utilization of resources Reduced productivity Increase in investment Idle equipment Large waiting / storage rooms Equipment running, not producing Unnecessary testing

WASTE of Motion Definition:Any movement of people or machines. Root Causes Poor ergonomics / layout Machine / process design Inconsistent work methods Poor workplace organization & housekeeping Extra “busy” movements while waiting Symptoms Reduced productivity Large reach / walk distances Longer lead times Excess handling Reduced quality People / machines waiting High energy cost Inappropriate use of resources

Resource Conservation and Pollution Prevention

Key Point Observations Overproduction (Too much, too fast) Correction (Rework, inspect) Material Movement (Too much, too far) Processing (Adds no value) Inventory (Excess stock, banks ) Waiting (Idle time) Motion (Inefficient movement) Unevenness (Overburden current methods) Observation Worksheet: Identification of Waste

Key Point Resource Conservation and Pollution Prevention Energy (Excess usage) Water (Excess usage) Transportation (Fuel use, emissions) Hazardous Waste (Toxicity, cost) Non-Hazardous Waste (Inefficiency, cost) Product Design (Cost, inefficiency, toxicity) Environmental Mgmt. Practices (Excess usage, waste) Other Observation Worksheet: Identification of Waste