Everyone has something against waste, excessive prices, duplication of work or activities without sense and reason. Especially in the work environment, activities that do not generate added value are often a horror. For example, when a process cannot continue due to missing information, information is typed out for the third time or documents have to be created twice due to missing interfaces. Many employees are familiar with such cases of wasted time or capacity but are unable to take a higher-level view. And: It has always been done this way.

As already explained in our last blog post, process modelling is an important method for increasing efficiency in a company. As part of our projects, we use an extended SIPOC model for this purpose, which we use to record our customers‘ actual processes in a structured manner and jointly develop target processes. This is always done from an end-to-end perspective so that optimisation takes place along the entire business process. At this point, however, the right question arises: How do you get from the actual to the future target? What needs to be focussed on, tackled and corrected? Or in other words: Where does the most waste occur and how can it be eliminated in the overall context?

This is where muda comes into the project work. Muda is the Japanese word for waste or pointless activity and is used in lean management for inefficient processes, i.e. activities that consume resources without adding value. Waste can have a negative impact on both quality and time. The term goes back to the long-standing Toyota production manager Taiichi Ōno, who played a key role in the development of the Toyota Production System (TPS) in the 1950s. The aim of this system was to make Toyota’s production processes more efficient and minimise waste. In addition to production processes, Muda can just as easily be applied to any type of process or workflow. While Ōno distinguishes between seven types of waste, an eighth was added later, so that today Lean Six Sigma speaks of eight types of waste, which are explained below using examples.

1. Error: discrepancies due to uncertain processes or missing information

Examples:

– Data is recorded in writing and then manually typed into a system. This results in transposed figures and the values recorded in the system are incorrect or have to be laboriously corrected.

– Incorrect products have to be reworked, which causes additional costs and wasted time. At the same time, customer confidence in the quality of the products can be jeopardised.

2. Overproduction: unnecessary processes or incorrect forecasts

Examples:

– Different players in the company create similar reports or documentation independently of each other without realising that other departments have already created a similar document. Reporting leads to unnecessary effort and resource consumption.

– A factory produces too many items that are not needed. On the one hand, resources are unnecessarily wasted that could have been used elsewhere. Furthermore, the overproduction has to be stored or even destroyed, which causes follow-up costs.

3. Delays: Waiting times in processes due to bottlenecks or lack of decisions

Examples:

– Employees are waiting for information, materials or preparatory work without which they cannot continue their work.

– If customer orders are processed without clear prioritisation, this can lead to delays in timely delivery or completion. Customer confidence decreases.

4. Unused talents: waste due to tasks not appropriate to the position or repetitive activities

Examples:

– The working time of a strategic buyer is tied up in following up individual delivery delays and coordinating with the supplier and the requesting department.

– A team leader carries out work that could also be done by a semi-skilled labourer.

5. Transport: time wasted due to inefficient processes

Examples:

– Processes to be authorised are passed from one decision-maker to the next in the company using signature folders. This not only eats up time, but also harbours the risk of processes being lost during the transport process.

– Materials or (preliminary) products have to be transported from one end of the factory to the other for various work steps in production, which costs time and energy.

6. Inventory: waste due to an excessive number of business transactions in individual process steps

Examples:

– The same document is stored both in paper form and (sometimes multiple times) digitally, without a centralised and integrated solution for archiving and managing documents. Unnecessary resources flow into the duplicate administration and organisation of stocks.

– A factory has too much primary material in stock that is not immediately required. This ties up capital and space.

7. Movement: Lack of concentration on a business transaction due to unnecessary switching of tasks

Examples:

– An employee is repeatedly interrupted from their current work by phone calls. For each call, they have to familiarise themselves with the topic being discussed, decide whether to continue their work in a different order due to the call and finally return to the interrupted task.

– In a production environment, tools or machines are not positioned at the correct workstations or in the immediate sorroundings of the workers. They must constantly move around to find or retrieve their tools instead of having them readily available at the workstation.

8. Extra processing: additional process steps that are unnecessary for individual business transactions

Examples:

– An incoming invoice is checked and approved by various instances, although the invoice corresponds 1:1 with the (approved) purchase order and goods receipt and a dark posting would be possible.

– Information or products are checked several times by different parties, although a single extensive check would be completely sufficient or the reduction of error potential in the upstream process could make a check completely obsolete.

These examples show that waste can occur in many areas, affecting both production and management. Identifying and reducing this waste helps companies to work more efficiently, increase production and service quality and save costs. At the same time, there is great potential to increase customer and employee satisfaction.

An important success factor here is the overarching view of the overall process. Many known wastes relate to the work situation of the individual. The optimisation approaches are often a relocation of activities without the elimination of waste in the overall process. This applies to both internal and external processes. Shifting a time-consuming activity to a supplier or another department does not avoid costs, only shifts them. The objective is to avoid waste and the associated costs in the overall process. The use of Lean Six Sigma and the continuous reduction of waste contributes to increasing efficiency and reducing costs.

ADCONIA – Out of the ordinary.

Consulting for procurement, supply and value chain with a focus on cost management, digitalisation, organisational development and sustainability.