Executive motion, waiting, overproduction, over-processing, defects, and skills. An

Executive Summary:

This paper will examine the eight
wastes associated with a lean management system: transportation, inventory,
motion, waiting, overproduction, over-processing, defects, and skills. An
introduction explaining the origin of Lean and how these wastes were discovered
will be discussed in addition to how each waste is applied to manufacturing and
healthcare service industries.

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I. Introduction:

When
discussing quality management and lean production, for many in manufacturing industries,
the first thing that comes to mind is Toyota. For more than seventy years the Toyota
Production System, largely the predecessor to lean management and lean
production systems, has served as the benchmark for many companies in the
aspect of quality. Through example, they have shown other organizations how to
maximize the utilization of workspace, employees, and management while
maintaining high quality perception and satisfaction in customers, as well as
smooth workplace environments. Edward Demming, an American engineer and
consultant in post-war Japan, is largely to credit for this revolutionary new
way of thinking. His 14 Points as well as other theories on how to improve and
standardize processes in manufacturing stresses the importance of eliminating
waste in order to achieve the most controlled and profitable industrial
processes 1. Lean is the culmination of these ideas that focuses on
eliminating seven types of “muda” or waste with an eighth being discovered by
Canon, another Japanese company, in the late 1990s 2. Taiichi Ohno, an
employee of Toyota, is credited with applying Demming’s concepts to the Toyota
Production System we know today. With an unyielding cost of healthcare in the
United States, there is now a push to apply lean methodology to the healthcare
industry in order to improve quality, patient safety and healthcare delivery.

 

II. Types of Waste: “Muda”

            There
are many different ways to effectively implement lean strategies in a
workplace. One of the main ways to do this is to reduce or eliminate wastes in
the process of producing, packaging, and/or delivering goods and services. A
waste is anything other than the minimum number of people, minimum amount of
effort, material information, and equipment necessary to add value to the
product or service 3.  In other words,
waste can be classified using the pneumonic, TIM WOODS, which is anything a
customer isn’t willing to pay for:

Transportation

Inventory

Motion

Waiting

Over-processing

Overproduction

Defects

Skills

 

1. Transportation:

This waste involves unnecessary movement from
one location to another. On a production line, the more hands that touch a
product more hands that touch a product the more
potential for the product to become defective. Not only is there the potential
for damage, there is also the time associated with the transfer that can be
costly.

An example of this would be when
customers for any service provider, say Comcast, feel the strain of unnecessary
transportation in the form of what some call “the run around.” Customers are
forced to either go from place to place, be it a web site or in their vehicles,
or speak with different people to get the desired service. This is costly in
the form of time and additionally causes frustration. A study conducted by
David. L. Hallowell, a founding partner of Six Sigma Advantage Inc. 4 looks
into the common call center and explains how even these centers can be optimized
for customer satisfaction. One of the many factors analyzed was transfer and
waiting time and their effect on new account growth. It was discovered that by
implementing lean and quantifiably justifying the hiring of additional workers,
there was an initial decrease in wait time by 10% 7.

 

2. Inventory:

The old theory of
manufacturing is the larger the batch size the larger the profits that could be
made. Don Mitchell, CEO of FSI international, a water and filtration system
manufacturer, warns industries of the theory, “If we make it people will buy it”
5. In the modern sense this philosophy has become antiquated as manufacturing
companies no longer set product prices nor stir demand as they used to. In the
current market, it is the customers that decide prices and ultimately determine
production schedules. An abundance of inventory, such as stockpiling supplies
and keeping data or emails longer than necessary has the tendency to hide many
problems such as late deliveries from suppliers, defects, equipment downtime,
and long set up times 7. It is also attributed to longer lead times,
obsolescence, damaged goods from underutilization and storage costs and delays.

 

3. Motion:

Unnecessary motion such as repetitive
key strokes or searching for tools can prove just as costly as wasting time. A
key tool used by industrial engineers is “right hand left hand charts”. These
charts are designed to study the motions of operators tracking how far they
move to conduct their work, by which hand, and how long it takes to complete
each task at their particular stations. The common practice on the manufacturing
floor is to “5s” the workstations, allowing for all the necessary materials to
perform that given job are placed right at that work station. The 5 S’s are
separate, straighten, scrub, standardize, and systematize 6. This could
involve unnecessary searching for necessary data to provide the services demanded
of the service provider, such as medical record in a doctor’s office, or
cleaning tools for hotel housekeeping staff, or a variety of other locations. Just
like with the other forms of waste stated above, unnecessary motion is costly
to an efficient process.

 

4. Waiting:

On a production line of a
manufacturing company, every minute spent not working is money that is not
being used to its full potential. Downtime is costly and therefore an identifiable
form of waste. Waiting includes workers standing around waiting for the next
step in a process such as tools, supplies, parts, bottlenecks, equipment
downtime 7. In the service industry downtime can be in the form of waiting by
either the customer to receive services or by the service provider in the form
of waiting for results. This can be just as costly, if not more so, than in
manufacturing. As technology improves and consumers have faster and faster access
to information and resources, they expect all things to be done faster and
better than yesterday. When customers have to wait in the service industry, it
can cost a company a customer. A restaurant is a great example of waiting times
and how lean can be used to alleviate excess waiting times when a kitchen is
transformed into a production line similar to an automobile plant.

 

5. Overproduction:

Producing more than the
customer wants or producing a product before the customer asks or earlier than
when is needed is considered waste. Overproduction also includes producing
items which there are no orders. This was the American way of manufacturing
automobiles. This excess or proactive production in today’s market typically
leads to wasted product or unwanted goods. Since Toyota introduced lean through
its production system, it has shaped a new standard for efficiency in the goods
market.

 

6. Over-Processing:

The more work that a worker
is expected to perform, the greater the chance that those actions will become
what was described as “non-value added” processes or steps. These actions that
do not directly add value to the finished product are waste and through the lean
process can be driven out 4. The healthcare industry is littered with this
type of processing waste with forms, data entry for these forms, data
processing of the forms that were formatted in the computer, then checked again
for mistakes and finally submitted to another department for more processing,
to ultimately end up in a database to not be moved again. This waste is costly
to both the service provider and the patient, as the cost of these redundancies
is often passed on to the patient 7. It also affects process capabilities in
both scenarios. If too much time is spent with non-value added activities,
there is a need for more workers, or if that is not an option the service
provider will have to accept less customers. Looking back at the restaurant
example cited previously, in order to create a lean system, the entire restaurant
would need to be mapped from process to process in order to determine which
were necessary to the final product and which were simply a waste. This process
is called “value stream mapping” and is common practice in the field of lean.
These maps can be adapted to any process in any industry. Once these processes
are mapped out, the ones not adding any value can be eliminated.

 

7. Defects:

The more defects in the
finished manufactured products, the more it will cost for either re-work or
discard of a defective product. In the healthcare sector, there are many forms
of defects that can be identified depending on the hospital and the particular service
each department provides that the company provides. In this field, mistakes (defects)
can mean lives. If a surgeon makes a mistake because a tool he or she needed
was not available, that person receiving the surgeon’s service could have a
longer recovery time, additional complications, or even die. Lean principles
are designed to ensure that defects are at the very least diminished, but
ultimately eliminated through the culture of continuous improvement 7.

 

8.
Skills

The suboptimal use of employee skills
is the newest waste identified by the Canon Corporation in the 1990s. This
includes understaffing, overstaffing, or utilizing someone with a higher
skillset to complete a task that someone with a lower skillset could have
completed. Not utilizing people’s experience, knowledge, skills or creativity
is costly 7. Most organizations understand that their employees are their
greatest resource and utilizing their skills at an optimal level results in an efficient
and cost-effective way to run an organization.

 

III.
Conclusion

The eight types of waste were discussed in this paper and
examples for manufacturing and healthcare industries were provided to
illustrate the importance of implementing lean management systems in these
sectors. Lean is about optimization through the elimination of waste and
control through the efficiencies of the process creating a culture of
continuous improvement 7. Currently in the healthcare industry, healthcare
organizations such as hospitals are just starting to realize the potential of
lean. But as healthcare costs continue to rise every year and the need to
generate more and more revenues with less resources increases, lean will become
a standard for any hospital or healthcare organization.

 

 

 

References:

 

1 “DEMING THE MAN –
TIMELINE”. Retrieved: December, 2017 Available: https://deming.org/deming/timeline
   

 

2 Liker, Jeffrey K. The Toyota Way: 14
Management Principles from the World’s Greatest Manufacturer. New York:
McGraw-Hill, 2004. Print.

 

3 Breyfogle, F.W. (2008). Integrated enterprise excellence. a
management and black belt guide for going beyond lean six sigma and the
balanced scorecard (Vol. 3). Austin, TX: Bridgeway Books.

 

4 David, H,
“David L. Hallowell”. Retrieved: December, 2017 Available: http://www.isixsigma.com/members/David-Hallowell/

 

5 Neely, L.
“CEOs Warn Industry to Always Be Prepared”. Retrieved: December, 2017
Available: http://www.embedded.com/print/4339175  

 

6 Groover, Mikell (2016) Automation, Production Systems,
and Computer-Integrated Manufacturing (4th edition). Pearson.

 

7
Schaeffer, Ian (2013). Retrieved: December, 2017 Available: http://www.northeastern.edu/nuwriting/wp-content/uploads/TheEvolutionofWasteInLeanthinkingitsapplicationtotheservicesector