Waste

So now it’s time to talk about waste.  Muda.  Non-value-added.

There are a few ways to list the 8 sources of waste but for the sake of simplicity, I will opt for using the DOWNTIME acronym.

  1. Defects
  2. Overproduction
  3. Waiting
  4. Non-utilized talent
  5. Transportation
  6. Inventory
  7. Motion
  8. Excessive Processing

So here’s a few things you need to know about waste in any form.

  • It rarely fits into any one of these buckets.  For example, inventory is often found waiting to be processed and requires transportation to move it around sometimes by highly skilled workers.  Inventory is also easy to overproduce just to make sure there’s enough and can contains defects waiting to be found.  And for materials susceptible to environmental conditions, it can spoil rendering it, well, trash.
  • Every value stream contains waste.  I’ve never seen a single example of a waste-free stream.  Often, we will map a value stream for the first time and find over 90% of the activities to be considered waste.  Remember, value is defined by the customer, not the producer.
  • Waste is money.  It will pull profits out of your process if it is not eliminated.  It will create safety, quality, delivery, and cost issues.  It can make your customers very unhappy with you because it might not fit their definition of value.
  • Sometimes waste is necessary.  Usually it is not.
  • Waste likes to hide.  It can be wiley.  Sometimes it can only be seen when you look for it.  The good news is there are tried and true methods for identifying and eliminating waste.  Plenty of ’em.
  • Once you learn to see it, you will see it everywhere.  Everywhere.

So how do we see waste?

We draw a map.  A big, beautiful map.  Using sticky notes.  When we are finished with our map, we will see the waste.

It will be glaring.  It will be ugly.  But when we put our our waste goggles on and see it, we can begin to do something about it.

Up next:  The Value Stream

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Michael Bates has over 35 years’ experience as a Lean practitioner, including 30 years’ leading manufacturing, engineering, and service operations.  He holds numerous Lean certifications and is a Six Sigma Master Black Belt.  Michael is also certified in Project, Program and Portfolio Management.

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Value

In my last post, I mentioned the game-changing book Lean Thinking by James Womack and Daniel Jones.  They get right down to business with the 5 principles of Lean, the first of which is Specify Value.

Value can only be defined by the customer and it only has meaning when it is expressed in terms of a specific product that meets the customer’s needs at a specific price at a specific time. 

Value can only be created by the producer.  Womack and Jones state that this is the reason producers exist — to create value for the customer.  So, to restate this from a from a Lean perspective, in order to produce value it first has to be defined by the customer.

I have led product development projects that we, as the producer, defined the value to the customer and can say that the products and related services were, at the end of the day, off the mark.  Assuming we new best resulted in costly product feature changes and launch delays.  A couple of the lines never fully recovered and the 3-year life cycle was plagued with inefficiencies, delivery and quality issues, engineering mishaps, and ultimately, reduced margins.

Our most successful projects involved key customers in the features design process and subsequent service of our flagship products.  This allowed us to hear their definition of value and design a product flow that delivered that value successfully throughout the 3-year life cycle of the product.  The momentum of that success carried forward into the next flagship redesign, which proved to be more successful.

Once we understood the value as defined by the customer, we deployed lean methodologies in all areas of the organization and lo and behold, we had some pretty favorable margins as the result of the cultural shift.  It’s easy to speak in terms solely of the product, but we dug in to truly understand our customers’ business models which ensured timely invoicing and payments.

Value.

Up next: Muda

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Michael Bates has over 35 years’ experience as a lean practitioner, 30 of which while leading manufacturing, engineering, and service operations.  He holds numerous Lean certifications and is a Six Sigma Master Black Belt.  Michael is also certified in Project, Program and Portfolio Management.

A Year to Make a Can of Soda?

I recently, for the umpteenth time, listened to Lean Thinking – Banish Waste and Create Wealth in Your Corporation and in my opinion, it stands the test of time.  This gem keeps Lean, or Continuous Improvement, simple.

Regardless of the product or service, it is as important as ever to understand the value to the customer, the value stream that brings the product or service to the customer, how to ensure your product or service flows based on demand pulling it through your value stream, and the importance of continuously striving for perfection.

My well-worn book has plenty of marked up pages and the audio book brings the familiar and soothing voice of Mr. Womack into my car.

You must experience this if you care about bringing value to your customers.

And yes, it can take up to a year or more to make a can of soda. Pick up a copy in the media of your choice and find out why.

Your thinking will never be the same.

 Have a great day!

Michael

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