Let’s understand the 8 wastes. Any business process transforms inputs into outputs. During this process of transformation, the process may either create value or it generates waste (Muda).
Value is added to an activity when it changes its form, function, shape, characteristics or attribute in the first time and the customer is willing to pay for it.
What is Waste (Muda)?
Muda is a Japanese word meaning Waste. Waste is any human activity which absorbs resources but creates no value. Let us look at some examples of waste. Excessive inventories of raw material, finished goods, Work in progress (WIP), Unnecessary movement of material from one station to another, Unnecessary calling a person to ask for details, when the details are already available in the computer, generating defects are all the examples of waste.
The most dangerous kind of waste is the waste we do not recognize. ~Shigeo Shingo
Generally, there are Seven (7) commonly recognized forms of waste. However off late, one more muda has been identified making it the 8 wastes.
The 8 Wastes or the 8 muda are:
- Intellect (Additional)
Let us look at each of these 8 wastes one by one:
- Muda of waiting: Muda of waiting occurs when the hands of the operator are idle or whenever goods are not in transport or being processed, they are waiting.
- Muda of over production: Overproduction occurs when more products are produced than required by the customers at any given point of time. It could happen in order to compensate the loss in production due to absenteeism, equipment breakdown, higher rejection rate, inconsistency in operation. Organizations produce more and try to hide their inefficiencies instead of eliminating the root cause.
- Muda of Rework (Defects): Whenever a defect is produced by the equipment or a process, it is considered to be a muda or defect. Since these defects are a cost to the company and also there is a cost associated with rework / disposal. This muda also interrupts the process.
- Muda of Motion: Any motion of a person’s body not directly adding value. Unnecessary movement of human body parts is one such form of muda of motion.
- Muda of processing: When we work more on a product than required by the customer, it leads to muda of processing. This also includes using tools that are more expensive and complex than required for the process / customer. Sometimes inadequate technology or design leads to muda in processing.
- Muda of Inventory: Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods constitute the muda of inventory. This muda blocks the working capital of the organization. Inventory to some extent is required, but more than the required, blocks money, occupies a lot of space and also creates unsafe conditions for the employees. Also, if we keep inventories for a long time, the product might get damaged, obsolete or expire.
- Muda of Intellect: It is actually a hidden loss until quantified. It is the loss that occurs by not deploying the right person at the right place. Organizations do not leverage on the individual capabilities and the core competencies of the individuals and incur losses on this account. As a result of muda of intellect, several times tasks are not being done in time / require more efforts and resources / more defects are generated / job not done at all.
- Muda of Transportation: Transport is an essential part of operations, but during transportation, the value is not being added. Each time a product is moved, it will consume more energy and resource, which might not be desirable.