SM4.0 Business Efficiency: Waste Reduction Introduction

Eight Types of Waste

Business efficiency relies upon waste management. The well-known Toyota car company identified seven types of waste that had an impact on Productivity and Profit.  An eighth has been added more recently.  By gradually reducing these wastes, you can improve the Productivity and Profit of your business.  In Japanese, this is referred to as reducing “muda” (pronounced Moo-da).  This article discusses how these types of waste might show up in your business; and what to do about them.  Waste reduction is an ongoing and probably never ending process.  This article gives lots of examples of waste in each of the categories.   To be most effective, you should tackle the largest waste items first so as to make the largest gains first. Waste reduction is a team effort ideally as those on the front-line probably already know what is wasteful; they are just not empowered and trained to combat waste.

Read this if: you are working on your business operating more efficiently. 

Relates to: 80/20 Rule for finding the biggest issues, Kaizen for incremental improvement, Constraints and bottlenecks.  Our Campaigns; Optimise100 and Grow 365.

Degree of Difficulty: Yellow (entry level) .  The Skills Module on managing waste to improve your Profit is not hard to do but requires perseverance. 

Business Efficiency: A Journey Into the Waste Lands

In any business that has been operating for a reasonable length of time, various inefficiencies and wasteful activities will have crept into the system.  Work on these to improve your business efficiency. Sometimes these are simple inefficiencies in existing operations and other times they are what is left of activities that may have ceased, or changed, but have retained some work practices that are no longer as effective as they might be.

Throughout 12Faces, we speak often of optimising your business to maximise its profitability.  Clearly, waste is less than optimal.  Spending time on identifying and reducing waste is spending time on identifying areas for improving your Profit and therefore thoroughly worthwhile.

Taiichi Ohno was a Japanese Industrial Engineer and a businessman who worked for the Toyota Motor Company.  Toyota is very well known for its production system which has many innovations to improve productivity; in this case of car manufacture.  The very effectiveness of these improved manufacturing systems caused a great deal of distress for Western car manufacturers who had not overhauled their production lines for many years.  Now, car producers throughout the world use the highly efficient systems initially developed by Toyota.

This is an opportunity for you to use some of their techniques to optimise your own business.

The Japanese word for waste, in the context we use it here, is “Muda” (pronounced Moo-da).

What is Waste?

A straight forward explanation of waste is that it is anything that adds no value to the final product or service.  This is something that the customer is not willing to pay for and therefore adds no value in their mind.

Index

The following articles are included in the Skills Module:

SM4.1 Eight Types of Waste
SM4.2 Capturing Waste in the Wild
SM4.3 Prioritising Waste Removal
SM4.4 Office Kaizen – Waste in Offices and Service Industries