Value" is any action or process that a customer would be willing to pay for. Lean manufacturing is a management philosophy focused on the reduction of the "seven wastes in" order to improve overall customer value.

1. 14/07/2009
Topics on Quality, Lean
Manufacturing and Productivity
Improvement
THE SEVEN
WASTES
Presented by
JORGE ROS
Lean Definitions
 Waste: Anything other than the exact amount of equipment, materials, parts,
space, and workers' efforts that are absolutely essential to add value to a
product.
 This is: Everything that increases production costs without
adding value to what is being produced.
 Value-Added: Anything that the customer wants and is willing to pay for it.
 Non-Value-Added: Anything that the customer doesn't wants and won’t
pay for it.
CUSTOMERS WILL ONLY PAY FOR THOSE THINGS THAT HE
NEEDS AND ITS USEFUL FOR HIM. ANY OTHER THING WE DO IS
A WASTE, A DISPEND OR WHATEVER WAY WE WANT TO NAME
IT.
¿WHO PAYS FOR IT?
1

2. 14/07/2009
The Toyota Production System
The Toyota Production System definition states that it is:
“A philosophical approach to business that is based on satisfying the
customer (internal or external) by producing quality products that are
just what they need, when they need them, in the quantity required
using a minimum of materials, equipment, space, labor and time (in
summary: To eliminate wastes).”
Lean System Components
PHILOSOPHY: To Eliminate Waste, Human Development,
Teamwork, Quality, Continuous Improvement, Problem
Solving, JIT, etc.
TOOLS: Kanban, TPM, 5-S, Mistake proofing, Cellular
Manufacturing, One Piece Flow, Quick Changeover,
Standardization, Value Chain Mapping, etc.
ACTION: Problem Solving, Brainstorming, Root Cause
Analysis, Implementation, Process Improvement Teams,
Training & Learning, etc.
2

3. 14/07/2009
Lean Philosophy Basics: for a new Culture
 JIT - Build to order. Produce  CUSTOMER FOCUS -
only what is needed. Satisfy customer needs.
 QUALITY - Don’t pass a bad  TRAINING - Everyone
part to the next process. knows what is normal or a
special variation.
 STANDARDIZATION -
Standardize processes.  COMMUNICATIONS -
Communicate all useful
 LEAN - Eliminate all waste.
information in a usable form.
Lean Philosophy Basics for a new Culture
 PRODUCE WITH QUALITY  VOICE OF THE CUSTOMER
–Think of a production system, - Learn from customers.
not a quality system
 MORE TRAINING - Team
 INNOVATION - Try new ideas. training & Problem Solving.
Change. Improve.
 KAIZEN - Continuous
 TEAM WORK - Everyone Improvement (PDCA).
participates. Management
 PROCESS ORIENTED -
supports workers.
Focus on the process not the
results.
3

4. 14/07/2009
The Seven Wastes
1. Overproduction.
2. Wait Time.
3. Transportation waste.
4. Processing waste.
5. Motion/Movement waste.
6. Inventory waste.
7. Defects waste.
Overproduction
Producing more products than is needed, faster than needed
or before they are needed is a waste.
Adding extra units to the quantity needed “just in case” or building to a
pre-defined lot or batch size is also wasteful.
4

5. 14/07/2009
Consequences of Over-Production
 Loss of Production Control.
 Fixing rejects becomes a low priority.
 Increased Mix-ups, mistakes and confusion.
 Valuable time and resources consumed (wasted) building
products that are not a priority.
Overproduction Causes
• Poor Planning Process.
• “Just-in-case” instead of “Just-in-time” production.
• Poor communications between departments.
• Low Capability Processes, that are unable of producing the quantity
and/or quality required in a consistent basis.
• Prolonged setup and cycle times.
• Sub-optimization caused by local optimization (Processes that
benefits a single department’s interests against the organization’s
interests).
• Low equipment reliability.
5

6. 14/07/2009
Wait Time
Wait time waste occurs when a worker cannot proceed with
the next task in a process.
There are workers waiting and doing nothing (wasting their time or
making others waste theirs) while others workload is excessive.
Wait Time causes
 Lack of an adequate maintenance.
 Need of proper tools or materials.
 Lengthy setup times.
 Lack of cross training.
 Lack of SOP or undocumented work methods.
 Production bottle necks.
 Irregular distribution of training.
6

7. 14/07/2009
Consequences of Wait Time waste
• Personnel that cost doing nothing (adding no value).
• Delays that lead to overtime to conclude what was programmed.
• Costs due to inefficient processes that exceed the standard costs.
• Loss of motivation; Low morale.
Transportation Waste
Any material movement that does not directly support
immediate production.
When product is transported to a place other than the next process
location or, the next process is not located adjacent to the current one.
7

8. 14/07/2009
Examples of Transportation waste
 Units are parked off the production floor to gather a
“full lot” for a batch operation.
 Production Lots that are sent off to the other side of
the plant for the next process step.
 This can occur, either between operations or within
an operation where workstations are not properly laid
off.
 Containers that are too big and difficult to open or
close.
 Excess of material handling equipment. Lift-trucks
that travel empty.
Transportation waste causes
• Improper Facility Layout
• Large buffers .
• Large lot purchasing or processing.
• Poor production planning.
• Poor scheduling.
• Poor work place organization.
8

9. 14/07/2009
Processing waste
Any unnecessary step, either production or communication,
that adds no value to a product or service.
Occurs when we execute an operations, and the customer is not willing
to pay for what is being done.
Processing waste causes
 Lack of a concurrent design.
 Processes poorly documented (Lack of SOP’s).
 Lack of customer input concerning requirements.
 Poor configuration control.
 Quality Standards not related to customer needs.
 Redundant inspections and approvals.
9

10. 14/07/2009
Consequences of Processing waste
• Time spent building a feature that is irrelevant to the
customer and that the customer will not pay for.
• Additional costs for materials used in excess.
• Lack of control because improper use of design documents.
• Products that either, exceed the requirements of the
customer or fail to comply with them.
Motion/Movement waste
Any movement of people which does not contribute to add value to
the product or service.
Persons moving from one place to another create a false impression of being
working, while in reality, are doing nothing. They are costing while adding no
value.
10

11. 14/07/2009
Consequences of Motion/Movement waste
 Employees move from one workstation to another, doing
nothing.
 They are unnecessary trips.
 No value is added during this process.
 Include time spent looking for parts, tools, fixtures, etc.
 Include time spent going to/from a warehouse.
Motion/Movement waste Causes
• Ineffective Layouts (equipment, office and plant).
• Lack of Visual controls.
• Poor Process Documentation.
• Poor work place organization.
11

12. 14/07/2009
Inventory waste
Any supply (Materials or Goods) in excess of what is required
to deliver products in a Just-In-Time manner.
These parts will need to be processed, moved, counted, stored, etc. Will
add to costs and can not be shipped to our customers.
Inventory waste causes
 Poor sales forecasting (Demand Forecasting).
 Long lead times (set-up and cycle times).
 Poor inventory planning.
 Poor inventory tracking.
 Unbalanced production processes.
 Processes that can not produce the required quantity or quality of
products in a consistent manner.
 Suppliers that can not supply the required quantity or quality of
products in a consistent manner.
12

13. 14/07/2009
Consequences of Inventory waste
• Large lot purchases of raw materials, only to be stored for
weeks or months.
• Very large WIP’s inventories.
• Low inventory turnover. Need of large working capital to
finance inventories.
• Damaged Products.
• Obsolete products.
Defects waste
Costs due to sorting, repairing and/or repairing products.
Include cost of materials scrapped due to defects.
Also consist in the cost of goods returned by customers, recall
campaigns.
Recycling part of the products is also a waste.
13

14. 14/07/2009
Defects waste causes
 Too many product models.
 High inventory levels.
 Inadequate tools/equipment.
 Poor employee training.
 Poor layouts.
 Unnecessary handling.
 Poor process documentation.
 Processes that can not produce the required quantity or quality of
products in a consistent manner.
 Suppliers that can not supply the required quantity or quality of
products in a consistent manner.
Consequences of Defects waste
• Excessive processing costs.
• Many additional non-value-added processes or operations.
• Additional quality control inspections needed.
• Damaged relations with customers.
14