The Seven Forms of Waste Continuous Improvement focuses on the identification and elimination of the 7 forms of waste: Overproduction Inventory Unnecessary Motion Transportation Waiting Over Processing Defects / Repair / Rework STATE: Would your company benefit from producing their product at a lower cost? Would workers appreciate changes to processes that lessen physical demands? STATE: The forms of waste we will be focusing on in this lesson are Overproduction, Inventory, Unnecessary Motion, Transportation, Waiting, Over Processing, and Defects/Repair/Rework. TRANSITION: Let’s review the 7 forms of waste individually and discuss the impact each has on processes, the work environment, or the company as a whole. Alabama Supplier Excellence Team

1. Over Production Producing products or materials before they are needed. Overproduction is the worst form of waste because it is the root cause of many other wastes. Results of Over Production: Products being produced in excess quantities Products being made before customers need them Excess Inventory Excess Transportation Hides available capacity Caused by: Working ahead of customer (internal/external) or process requirements STATE: Overproduction. This is worst form of waste. Who can tell me what is meant by overproduction? STATE: There is a common mindset that professes “If you’re not ahead, you’re behind,” however, this philosophy can be costly in a production environment. STATE: Think about why this approach could cost the company money, and share your ideas on how overproduction can be a bad thing. ASK: Where does overproduced product reside? What issues could this cause? ASK: What other problems can be caused by working ahead? ASK: Who would an internal customer be? Who is the external customer? ASK: What happens if a defective part is discovered and immediately replaced? Alabama Supplier Excellence Team

Waste Of Overproduction : Example OPERATOR SHOULD BE IN THIS STATION (ST 16) BUT IS WORKING AHEAD IN ST 15 STATE: In this example, the operator is working out of station. He should be Station 16 which is his work area, but here he’s seen working his process in Station 15. STATE: What issues do you think this could cause for those who work in Station 15? STATE: What problems may working ahead cause for himself? TRANSITION: Let’s look at another form of waste. Alabama Supplier Excellence Team

2. Inventory Excess inventory is not directly required for current customer orders. Results of Excess Inventory: requires space costs money and ties up capital search and transport damage hides defects excess WIP and finished out-of-date product Increased deterioration Caused by: Working ahead of build requirements High WIP standards No WIP standards Lack of JIT/Pull system STATE: Inventory reduces a company’s cash flow. Excessive inventory In the form of unsold goods, impacts a company’s ability to respond to changes in customer demand patterns. While inventory is necessary, it should remain lean. STATE: Some suggest that a large inventory helps a company meet its customer’s demands. However, excess inventory is not something the customer cares about. What they do care about is having what they need when they need it. If a customer needs only one, they don’t care that the company has 1,000 more like it, just waiting for them. All they care about is meeting their current need. ASK: Do you remember who we identified as our customer? STATE: Let’s talk about the production environment and the impact excessive inventory can have on our internal customer. ASK: How can excess inventory in an area cause problems for the owner of the process? ASK: Where is this excessive inventory stored? ASK: What impact would that have? ASK: How might it cause problems for their customer? ASK: What happens to inventory if there is a part change? Alabama Supplier Excellence Team

Excess Inventory: Example STANDARD SET AT 4 HIGH X 3 DEEP PART BIN STACKED 6 HIGH ASK: What type of waste is depicted here? Why? What are some of the problems this type of waste could cause? STATE: In this example, you can see in the photo on the left the standard is set for 4 totes high by 3 totes deep. In the photo on the right, there is excessive inventory on the floor. Visibility is restricted and retrieving the totes may pose a time issue or a safety hazard. Alabama Supplier Excellence Team

3. Motion Unnecessary movement in a process. Some Results of Motion: unnecessary walking poor ergonomic conditions part transfer reaching and stopping and walking to locate/ pick up parts/tools Caused by: poor parts placement poor process flow poor work station layout STATE: Motion can be considered waste when it is unnecessary. Excessive walking, reaching, bending grabbing or transfer of parts, can all be considered wasted time and effort, and can contribute to inefficiency. ASK: Why would “walk” be considered waste? ASK: What about transferring parts from one person to another? How is that waste? ASK: Have you ever lost a tool or part? If so, did you ever question why, or think of how you could keep that from happening? STATE: Wasted motion can be eliminated by ensuring parts are located as closely as possible to the place at which they are used, and at a level in which they are easily accessed. You can also save motion by making a place for everything or by enhancing/improving your tools. INSTRUCTOR NOTE: Provide examples of excessive motion and/or give the following example: Someone who uses bolts to attach parts in hard to reach places may accidentally drop the bolt and then chase it on the floor occasionally. This action may be reduced through the use of a magnetic bit on the tool. TRANSITION: Let’s continue on and take a look at an example of wasted motion. Alabama Supplier Excellence Team

Waste of Motion: Example ASK: What is this person doing in this photo, and what type of waste is depicted here? STATE: In this example, this team member must untangle the hoses to the backup guns in the top coat booth before he can use it. ASK: What problems could this wasted motion cause? TRANSITION: Let’s look at another form of waste. TEAM MEMBER IN PAINT SHOP ATTEMPTING TO UNTANGLE HOSES TO THE BACK-UP GUNS IN THE TOP COAT BOOTH. Alabama Supplier Excellence Team

4. Transportation The unnecessary movement of materials Results of Transportation: Loss of traceability Damaged goods Increased Lead Time Excess Costs Storage space Caused by: Poor parts storage Poor Work area layouts Working ahead of build requirements Lack of JIT/ Pull system ASK: What is transportation, and why do you think it is a form of waste? STATE: Transportation is materials handling. Excessive handling and moving of materials from one place to another could result in losing track of its location, as well as time spent searching. This also increases the need for greater lead time to make materials available, which could lead to excessive inventory and storage requirements. In addition, every time items are transported, the risk of damage increases; which in turn, leads to scrap and excessive cost. ASK: Where is transportation in your work area or process? ASK: Is this transportation really needed? ASK: How would you eliminate the transportation? ASK: How would this improve your process? Alabama Supplier Excellence Team

Waste of Transportation: Example ASK: What form of waste is depicted here? What is it happening, and why is it considered waste? STATE: In this example we see the conveyance delivers a tote of brackets to the floor, but the team member must go get them and carry them to line side. ASK: What would you do to improve this condition? TRANSITION: Let’s discuss another form of waste. BODY SHOP CONVEYANCE DELIVERS AMS BRACKETS TO TABLE ON THE FLOOR BODY SHOP T/M CARRIES PARTS TO RACK LINESIDE. Alabama Supplier Excellence Team

5. Waiting Periods of inactivity in a downstream process that occur because an upstream activity does not deliver on time. Results of Waiting: Over Production Over Processing Idle resources Non-Value added work Caused by: Line stops Waiting for Material Repair/Maintenance Waiting for equipment to process Missing tools Non- “Full” work process STATE: Waiting is a time of inactivity. STATE: This could be caused by having to wait for loading or unloading, waiting for repair work, waiting for equipment to process, or even waiting to use a tool. Wait could also be caused by a lightly loaded work process; one in which the team member simply doesn’t have enough to do. ASK: Do you ever experience wait time? ASK: If so, what do you do with your time while you are waiting? ASK: Does it impact others when you wait? If so, how? Alabama Supplier Excellence Team

Waste of Waiting: Example ASK: What form of waste is depicted here? STATE: In this example, a team member down the line waits because a robot went down. ASK: Have you found yourself in a similar situation? ASK: If so, what would you do while you wait? TRANSITION: Let’s look at yet another form of waste. TEAM MEMBER WAITING ON BODY IN ST. 3900. ROBOTS IN ST. 2400 WENT DOWN CAUSING DOWNTIME Alabama Supplier Excellence Team

6. Over Processing Producing more or better than the customer requires. Results of Over Processing: Increased Processing Time Costs Incorrect process/equipment Caused by: Refining the product in ways or areas not important to the customer Wait Time Unclear Quality Standards ASK: What is over processing, and how is it different from over production? STATE: Over Processing is producing more than is required. STATE: An example may be a team member shining the paint on a part that will be attached to the underbody of a vehicle. Shining underbody parts is not an activity the internal customer requires, nor is it an activity the end customer requires. STATE: Another example would be checking the torque on a previously torqued bolt. ASK: Have you seen forms of over processing in your work area or process? ASK: Is it required? ASK: Why did the over processing occur? Alabama Supplier Excellence Team

Waste of Over Processing: Example ASK: What type of waste could this be? What is the team member doing? STATE: In this example of over processing, the team member is sanding a door that had no defects. ASK: Why do you suppose a team member would do this? TRANSITION: Next we’ll discuss the final form of waste. BODY SHOP T/M SANDING DOOR THAT HAD NO DEFECTS Alabama Supplier Excellence Team

7. Defects/Repair/Rework Products or aspects of the production processes that do not conform to specifications or to the customer’s expectations. Results of Defects/Repair/Rework: Customer Dissatisfaction Non-Value added work Extra costs Extra space Extra inspections/checks Caused by: Scrapped parts Wrong or defective tools or machines Wrong or missing processes Poor Problem Solving Unclear Standards ASK: Why do you suppose defects/repair/rework is considered waste? STATE: Defects/Repair/Rework is irregular products or materials that interfere with the flow of production, and the associated action taken to correct it. ASK: Have you encountered defects in your work area? ASK: What action are you required to take when you encounter a defect? ASK: How would you eliminate the defect? ASK: Would this improve your process? How? Alabama Supplier Excellence Team

Waste of Repair: Example ASK: What form of waste is depicted here? What is the team member doing? STATE: In this example, this team member is making a spot repair. ASK: Does her action to repair the spot ensure the defect won’t occur again? ASK: How could this type of repair/rework be avoided? LESSON SUMMARY: We’ve discussed the 7 types of waste. These are the areas to which we will refer time and again during this workshop. It is critical to the continuous improvement effort for you to be able to identify these forms of waste. When we go to the floor and look at our processes, be sure to review them from a perspective of waste elimination, and identify activity in these processes that may fall into any of the 7 categories we’ve discussed. PAINT SHOP T/M MAKING REPAIR IN SPOT REPAIR BOOTH. Alabama Supplier Excellence Team