The Seven Wastes To Be Eliminated

1. Overpoduction and early production – producing over customer requirements, producing unnecessary materials / products

2. Waiting – time delays, idle time (time during which value is not added to the product)

3. Transportation – multiple handling, delay in materials handling, unnecessary handling

4. Inventory – holding or purchasing unnecessary raw materials, work in process, finished goods

5. Motion – actions of people or equipment that do not add value to the product

6. Over-processing – unnecessary steps or work elements / procedures (non added value work)

7. Defective units – production of a part that is scrapped or requires rework.

Applications

Lean techniques are applicable not only in manufacturing, but also in service-oriented industry and service environment. Every system contains waste, i.e. something that does not provide value to your customer. Whether you are producing a product, processing a material, or providing a service, there are elements which are considered 'waste'. The techniques for analyzing systems, identifying and reducing waste, and focusing on the customer are applicable in any system, and in any industry.

Lean thinking may also be applied for getting rid of bureaucracy in your home office. To run your home office more effectively and faster you may need just as little as 10% of its current staff. Only executives who have a direct involvement with finding, keeping, or growing customers as well as key support staff – accountants, tax, legal and human resources people – should stay. Others can be rehabilitated by sending to an operating unit.

Case in Point: IBM

IBM regularly compare part counts, bills of materials, standard versus custom part usage, and estimated processing costs by tearing down competitor products as soon as the latter are available. Through such tear-downs during the heyday of the dot matrix printer, IBM learned that the printer made by the Epson, its initial supplier, was exceedingly complicated with more than 150 parts. IBM launched a team with a simplification goal and knocked the part count down to 62, cutting assembly from thirty minutes to only three.