How the seven wastes apply to supply chain
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The seven wastes are a well established tool often used in Lean Manufacturing which help identify areas within a business which can be improved.
The seven wastes are a lean tool and are aligned to the principles of value a within process. In lean, processes are configured so that they include only activities that add value to the item and ultimately to the customer – with everything else seen as waste.
There are two forms of waste – firstly there is necessary waste – whereby the activity does not add value to the end product but is necessary for the process to function – secondly there is waste which can be irradiated (which can improve either cost or lead time as a result)
The key thing to remember about the seven wastes is that they do not just apply to manufacturing in fact they are very much relevant to supply chain or any process for that matter.
What are the seven wastes and how do they apply to Supply Chain?
1 – Overproduction
Over production refers to making too many of something – more than is required to satisfy the end customer at that point in time.
2 – Waiting
Waiting is queue time – how often does one activity stop with the process owner having to wait to commence the next step – think of a pile of requisitions that a buyer might be reviewing – you will take your requisition but will have to wait until they have reviewed the ones ahead of you in the work queue.
3 – Transporting
Moving products from location to location does not add value – it requires the use of resources and results in cost and lead time increases. This can equally apply to documents being moved around a building during their process as it does relating to the physical shipment of goods and materials.
4 – Inappropriate processing
Doing more work than in necessary – for example – do you really need to go out to quote to 20 different suppliers or will just 2 suppliers do? What about the 10 different approval signatories required on a simple purchase order?
5 – Unnecessary inventory
Excess inventory can be a substantial costs to many organizations tying up valuable resources and creating wasteful extra processing.
6 – Excess motion
Lean attempts to simply processes by providing everything that the worker needs situated within or close by their workstation – consider the office worker where the printer is all the way over the other side of the office and time is wasted in walking to and from the device during the day.
7 – Defects
Lean aims to make the perfect product every time – defects are considered waste – this is easy to envisage in a manufacturing environment where an assembly line is churning out product but perhaps less so were services are provided. However many examples abound – consider a report that is produced with errors on it that has to be reworked.