Pain Points = Waste?

Posted by Mike on January 2, 2009

In the book, The Toyota Way, it is stated (p. 87) that “Most business processes are 90% waste and 10% value-added work.”

“Traditional business processes, in contrast, have the capacity to hide vast inefficiencies without anyone noticing – people just assume that a typical process takes days or weeks to complete.  They don’t realize that a lean process might accomplish the same thing in a matter of hours or even minutes. – The Toyota Way, p. 88

“The first question in TPS is always “What does the customer want from the process?” (Both the internal customer at the next steps in the production line and the final, external customer.)  This defines value.  Through the customer’s eyes, you can observe a process and separate the value-added steps from the non-value-added steps.  You can also apply this to any process – manufacturing, information, or service. – The Toyota Way, p. 27

1. Overproduction – Producing items for which there are no customer needs.
2. Waiting – Workers “standing around” waiting for the next processing step.
3. Conveyance – Moving work between different processes or storing work.
4. Over processing or incorrect processing – Taking unneeded steps to process the work or inefficient processing which produces defects.  This could also be caused by producing higher-quality products than needed.
5. Excess Inventory – This is harder to identify in the office environment, but think about work stacking up in one function area.  A constraint or inefficiency causes the work to “get stuck” at this bottleneck.  There may be some functions that should be outsourced to eliminate this “inventory” from your business processes.
6. Unnecessary Motion – Any wasted motion that is performed during the course of work.  Walking is an example of this. So are many meetings.
7. Defects – This refers to production defects that require rework, inspection, special handling time, extra cost, or lost revenue.
8. Unused Creativity – This is not in the core seven types of waste, but in the world of knowledge workers is a real form of waste.  This happens when you do not engage or listen to your workers.  It also happens when no time is set aside to think.  The cost can be high in terms of missed opportunities to save time, capture ideas, and improve skills.

As you look to improve the efficiency of your business process, examine everything in light of the eight wastes listed above.  Be brutally honest in your evaluation and then take positive action.  This will help you identify and eliminate the real pain points that are holding your business back.