8 Wastes Of Lean: How To Control? 2024 [Updated]

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To acquaint you with Lean Six Sigma, it is that management tool that helps in improving operations of any industry by significantly reducing and limiting wastes in different areas of a business. It is a statistical way of representing steps in an operation or a process of a business that do not contribute to its success in any way and are rather a reason for its inefficiency.

8 wastes is one Lean Six Sigma tool that helps in identifying check points in a process and eliminating them. This tool applies to a vast array of businesses, from manufacturing industries to service sectors; from small scale enterprises to big companies. This Lean Six Sigma tool has its origin in Japan, when one Mr. Taiichi Ohno, Toyota’s Chief Engineer applied muda (A Japanese term for waste) to its operations. Result was development of this Lean Six Sigma tool which has now come to life across various sectors of businesses. 

The 8 Wastes and the 8th Waste.

When we talk about wastes, we are talking about those areas in a business process which increase costs of a company, in terms of time and money, ultimately leading to escalated prices for the customers to pay. It helps you understand that a particular step in a process is not contributing to the credibility of a product or a service in the eyes of a consumer.

The 8 wastes are Defects, Overproduction, Waiting, Non-Utilised Talent, Transportation, Inventory, Motion, and Extra-Processing. Although the concept was earlier developed as 7 wastes, the 8th waste, i.e., Extra-Processing is a very recent addition to the club. 

It is a common understanding that all these wastes exist in a business or at least have a potential to exist. If it is not already there, it is likely that it may crop up somehow, either due to change in process; introduction of a new product; or a prolonged use of a single technique to develop a product. Therefore, all enterprises need to keep these wastes in mind, and use this tool periodically to keep a check and eliminate them. 

Below is the list of 8 wastes and how to control them:

1. Defects

Defects is one of the eight wastes of lean. One of the major reasons Six Sigma was developed was to reduce the number of defects in a product or a service. Defective product means either you cannot sell it to the customer, or if you do sell, you will expect a return request from them. You ultimately end up refurbishing that product or chucking it away into trash, leading to waste of hard labour, raw materials, and everything else that has gone into it. And when this cost does not materialise into profits, companies end up distributing that cost over other sale-able products. Hence, the increased price. 

In the present market scenario, we all know that a customer is king. A word of mouth can significantly impact your business. Therefore, reducing the number of defects occurring in manufacturing products or delivery of services to avoid increased costs and customer dissatisfaction should be the cornerstone of any business. The best way to do so is to focus on quality rather than quantity. 

You can avoid this waste by identifying those defects that are repeatedly occurring. Draw process maps to understand where and why these defects are happening. Once identified, use standardised work to maintain the flow by clearly laying down and documenting the parameters that were identified. 

2. Overproduction

Biggest factor contributing to eight wastes of lean is overproduction. You often see this in wedding occasions, when there is more quantity of food being cooked than the estimated number of people expected to attend the wedding. Similarly, when factories produce more than the demand there is, the products remain idle. In case of perishable goods, this only leads to rotting and desolation.

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In case of goods that are not perishable, they will sit idle in the godown, halting further production, and leading to payment of fixed costs like electricity and godown rents and incurring capital expenditure for absolutely nothing. In other kinds of offices, overproduction could mean printing more copies than there is need for, generating documents and data that may not be required, delivering before the customer even decides to have a particular product or a service etc. 

The only way to avoid this waste is to reduce haste and produce only what is required. Regular communication with the sales team is important to understand the level of demand. Use kanban Pull Technique to control over production. 

3. Waiting:

Waiting is another type of eight wastes of lean. This may involve instances like waiting for instructions from the supervisors, waiting for the raw material to come, waiting for machine downtime, conducting unnecessary meetings etc. Waiting can lead to increased costs for nothing. You will always end up paying extra in the form of fixed costs and for idle employees who would have instead worked on new projects.

The best way to avoid waiting is establishing clear communication channels.  When employees have been given clear instruction regarding their role, they don’t have to wait for any further instructions. Clarity in any organisation resolves half the problems. Issuing standardized working instructions and using processes to ensure continuous flow will help in significant reduction of this waste. 

4. Non-Utilised Talent

We often see employees in an organisation sitting idle for days and days. Most become torpid after a period of continuous working. The reason can be attributed to stretched working hours, over-employment, and company politics. Some days there is a huge workload, the other days there is barely anything to do.

When more employees are hired than there is a requirement for, they tend to sloth around, ultimately leading to poor productivity. Further, company politics and ego problems at times entails a boss to become oblivious to his/her employee(s) in the team. 

Hire the best talent available in the industry and a good team leader who understands the value of the workforce, encourages teamwork, and who motivates every employee to contribute to generating ideas and building business in the best possible way. Using tools like Takt-Time and Heijunka Box helps in distributing working hours equally across days and will help employees deliver better as they would no more be consumed by over-time and fatigue. Giving personal space will give best results.   

5. Transportation

Transportation means delivery of products or a service from an industry to end consumers. Delivery of a product is that one step in a process that doesn’t add much value to the business, but you also cannot avoid it. This is one of the eight wastes of lean. Before a product reaches the customer, it goes through various stages. First, it reaches an agent who purchases goods in bulk. Next, he sells these to a wholesale agent. This wholesale agent further sells to retailers, and finally it reaches the consumer. Usually, the burden of delivery cost is borne by the end consumer. The more a business spends on transportation, the more costly a product or a service becomes. 

Therefore, the best way is to identify that chain in the transportation, which is not required; or find an alternative route which best helps to minimise cost and time. Use tools like Ishikawa Diagram and Value Stream Mapping to find out shortcomings in a transportation process.  

6. Motion

While transportation is associated with movement of products, motion is associated with movement of employees in an organisation. When things are not arranged properly, employees spend a lot of time searching what is where. When communication channels are not congruous, employees end up wasting time on looking for the appropriate person to reach out to. This is wasting time in motion. it’s important that you optimize all working hours to improve employee efficiency and contribution to business goals. 

The 5Ss works best as a countermeasure to get rid of this waste. Sort, Arrange, Clean, Improve and Self-Discipline helps an organisation put things in order and keep cleanliness a top priority at work. 

7. Inventory

In simple accounting terms, wastage of inventory means dead stock. This occurs when you purchase raw materials more than the requirement there is; you produce more than there is demand for; and you over-produce Work-in-Progress etc. Deadstock means more storage costs. You cannot go for further production unless the dead stock is cleared, which ultimately results in idle plants and machinery, payment of fixed costs without any production activity being carried on.

Communication between the sales department and inventory department about the exact demand of the product could work as an antidote for this waste. Using the Kanban Pull System as a Lean Six Sigma Tool here works best to keep track of production. 

8. Extra Processing

 The 8th and the final waste is extra-processing. This refers to using more than what is required. Using a high-end machine unnecessarily for simple production, over analyzing a step or a process, conducting unnecessary meetings, etc.  directly contribute to wastage of time and money.  Anything extra is  poison for the company. 

Always keep in mind customer needs and demand. Produce according to what is required and use Lean Six Sigma tools like Failure Mode and Effect Analysis (FMEA) and Value Added Flow Analysis to look for areas that add value to a product or a service in the eyes of a customer and eliminate unnecessary steps in an operation. 

Conclusion

In today’s time, when competition is at its peak, it is of utmost importance that every organisation, Industry, Business, or an Enterprise uses Lean Six Sigma tool to survive that competition. There are various ways of maximising profits and customer satisfaction. You may sometimes be tempted to increase the price of a product to generate more revenue. However, instead of increasing price, focusing on these eight wastes mentioned above will be able to achieve the same goal, i.e., maximum profits with minimal cost. In the long run, consumers will only look forward to substituting their more expensive products with cheaper ones. Once you establish yourself in the market with quality product and effective cost, there is no looking back.

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