Operations Planning and Control

(Unit 4 notes)
2nd Year 3rd Semester
January 2023

Unit 4: Waste Management

In lean manufacturing, “waste” is defined as anything that doesn't add value to a
product. “Value” in manufacturing is defined as anything that a customer would be
willing to pay for. So, waste is any cost incurred in a process that does not benefit
the customer.
Muda is the Japanese term for 'waste', 'uselessness', and 'futility', but is most commonly
used to mean 'waste', and specifically within a business context. In business, actions that don't
directly provide value to a business are defined as wasteful

Muda translates roughly as waste, and refers to the inefficiencies within

processes which you can seek to reduce or eliminate entirely.

As Rene T. Domingo outlines in his paper Identifying and Eliminating The

Seven Wastes or Muda for the Asian Institute of Management:

The elimination of waste is the primary goal of any lean system. In effect, lean
declares war on waste – any waste. Waste or muda is anything that does not
have value or does not add value. Waste is something the customer will not
pay for.

We’ll look at the core 7 types of waste Toyota see within processes
and production systems and consider the claims for the addition of an eighth.

The 7 forms of muda:

 Waste of overproduction (largest waste)
 Waste of time on hand (waiting)
 Waste of transportation
 Waste of processing itself
 Waste of stock at hand
 Waste of movement
 Waste of making defective products

Waste must be identified in order to be eliminated

The two key forms of wastes are obvious wastes and hidden wastes.

Domingo claims that hidden wastes are often the most dangerous wastes. His
position is that hidden wastes are not addressed, even in small ways, which
allows them to grow and results in hidden wastes being larger than obvious
ones.

Domingo compares hidden wastes to an iceberg; once you spot the tip you
should know that there’s a greater body hidden under the surface.

The primary steps he lists in tackling waste are:

1. Make waste visible.

2. Be conscious of the waste.
3. Be accountable for the waste.
4. Measure the waste.
5. Eliminate or reduce the waste
These simple steps rely on awareness, discussion, and accountability as much
as they rely on analysis or action.

Normalization of deviance can seep into a company and eat away at its
effectiveness and output. One of the core motivators of normalization of
deviance is an unwillingness to be self-critical in the way you approach you
business operations; relying on techniques you’ve come to accept as normal
within the company, whether or not they are beneficial for the company.

Once you have identified and measured the waste then you can see the
reasonable steps to take to combat it.

Types of Waste :

Muda is not an entirely independent concept. It coexists with mura and muri.

Muri translates to overload or burden. It refers to working something beyond

capacity; whether that is equipment in a factory, or your labor force. Working
something beyond capacity can lead to decline of output over time or even a
sudden shutdown. Depending on your industry and the nature of the processes
in place, this can prove catastrophic.

Mura translates as unevenness. You can think of muri as being one of the key
causes of bottlenecks; one process in a production system fails to reach the
output of the others, resulting in provoking waste in the other processes as they
are not able to reach their maximum or optimum output.

Mura and muri are not wastes explicitly but they can be catalysts for further
waste or future waste. As Domingo outlines:
In a way, mura and muri also cause wastes but in a particular way.

It’s as a result of the recognition of muri and mura and other variables that
many firms have attempted to incorporate other wastes into the list of core
muda.

One particularly effective approach which has been taken up across the
industry is Downtime.

Downtime is advocated for by The McDonald Consulting Group in their

article What are the 7 wastes in Lean?

They show how the addition of a further muda can create the mnemonic
Downtime:

 Defective Production,
 Overproduction,
 Waiting,
 Non-used Employee Talent (the 8th form),
 Transportation,
 Inventory,
 Motion, and
 Excessive (Over) Processing
Other 8th candidates have been proposed but considering the need for an
increase in productivity output across many western nations, it seems that non-
used Employee Talent is a good suggestion to add to the list.

The difference between post-downturn productivity performance and the pre-

downturn trend across the G7 in 2015 averaged 7.5% according to a
2017 ONS report International comparisons of UK productivity (ICP), final
estimates: 2015. So further growth would certainly benefit from utilizing
approaches and software which can increase the value of a worker’s output.

According to the report Four Fundamentals of Workplace

Automation from McKinsey, 15% of the average marketing executive’s time
can be automated with existing commercially available technologies. If we free
up our workers from repetitive tasks like data entry then they can focus on the
highest value tasks which increase their personal contribution to the company.

If you want to read more about how you can utilize automation technologies in
your business, it’s a good idea to download our free ebook Ultimate Guide to
Business Process Automation.

We’ve included the waste of underutilized workers as one of our core wastes
within this article, as we feel companies can do a great deal more to unleash
the talents of their existing workforce and boost productivity company-wide.
Waste of overproduction (largest waste)

Overproduction waste is often overlooked by companies who see extra stock as

being an asset rather than a liability. However, the costs of running machinery
or services above the rate of production can be a hidden waste these companies
may not consider. Combined with the extra costs of holding excessive stock or
being unable to sell extra stock after a certain period, this can create further
wastes for a business.

What is it?

 Producing more than what is needed

 Producing at a faster rate than is needed
 Holding on to excessive inventory

What causes it?

 High capacity equipment above the needs of production

 Poor production planning, mapping, and scheduling
 Inappropriate use of incentivization focusing workers on the wrong tasks

How do we fix it?

 Just-in-time production systems create products at the rate they are

needed
 Pull systems in production can be used to tailor production to meet
demand
 More accurate sales projections can reduce overly-high targets and
rebalance production priorities

Waste of time on hand (waiting)

Waiting occurs in all businesses and can be as simple as being late for
meetings. In an industrial setting, the problem may be a result of material
issues such as damaged machinery or delayed raw materials. In these
environments it is important to analyze the cost of the waste and calculate how
long it would take for a capital injection into new equipment to pay off.

What is it?
 Time spent where workers are idle
 Time spent where machinery is idle
 Dead time where projects stall and budgets spiral

What causes it?

 Unsynchronized processes and line imbalances

 Overstaffing, understaffing, or poor allocation of labor across a project
 Unscheduled machine downtime or shortage of raw materials

How do we fix it?

 Process mapping and BPMN techniques allow managers to see an

overview of entire flows
 Increased communication with suppliers or deliveries to combat
downtime
 Flexible labor force capable of taking on responsibilities across different
company areas

Waste of transportation

Businesses are full of moving parts. These parts could be equipment, products,
workers, or documents. A simple example of reduced movement applicable to
any business would be the use of cloud based document signing systems. This
allows people to sign contracts or sign off on reports without posting,
delivering, printing, or scanning. Simply view the document and tap to sign
digitally. You can use services like DocuSign or Process
Street’s Inbox and assigned tasks to overcome problems in the movement of
documents and in review processes.

What is it?

 Unnecessary movement of products from production to sale

 Unnecessary movement of materials or products in the production
process
 Unnecessary movement of tools or equipment in the production process

What causes it?

 Poor route planning and distant suppliers or customers

 Unnecessarily complex material flows or production processes
 Disorganized workplaces which fail to minimize transit distances or
expense

How do we fix it?

 Moving aspects of production to be localized, possibly as part of

increased vertical integration
 Mapping transport flows in the production process and seeking to
streamline and standardize these patterns
 Increased digitization or paperwork reduction to decrease movement in
business processes
Waste of processing itself

A constant search for product perfection can sometimes lead to a product being
over-processed. This often comes from a misunderstanding of why customers
buy your product, and what looks better to the product designer might look
worse to the customer if the necessary market research and customer
satisfaction data isn’t present. The need to define quality in business terms is
the core concept in William Edward Deming’s theory of business; a position I
argue in a previous article on The Deming Cycle. Failing to grasp the
customer’s conception of quality may lead to over-processing a product or
service.

What is it?

 Non-value added processing by labor

 Non-value added processing by machinery
 Creating unnecessary quality or depth beyond the customer need

What causes it?

 Unclear understanding of customer product satisfaction

 Excessive focus on refinements and detail
 Frequent engineering changes and unclear or poorly documented work
instructions

How do we fix it?

 Value stream analysis, also known as information-flow mapping
 Waterfall diagrams help companies measure the cumulative effect of
sequential variables
 Streamlining standard operating procedures to reduce overall volume of
documentation

Waste of stock at hand

Holding too much inventory can slow down a business and create problems in
storage. This form of waste may be down to overproduction – if it is, the
solution is to tackle that waste and see the stock waste decline in turn.
However, this depends on each business. Certain products may be valuable to a
business but be sold in lower quantities, creating the space for variable
demand. In this instance it may be more expensive to have a stop -
start production system, than to hold excessive stock generated through a
continuous flow. Only by identifying, measuring, and analyzing this waste can
the right solution for your business be determined.

What is it?

 Possessing excessive amounts of inventory

 Possessing excessive amounts of raw materials or equipment
 Often the direct result of overproduction

What causes it?

 Overproduction; in many cases down to line imbalances or large batch
sizes
 Poor sales or distribution performances, often connected to large
minimum purchase standards
 Misunderstanding the market need or overestimating future business
performance

How do we fix it?

 Tackle waste of overproduction if it is seen to be the underlying cause

 Reassess production targets in order to better meet demand
 Analyze the production rates of slow-moving stock with variable
demand

Waste of movement

The most obvious forms of wasted movement involve poorly organized

factories or service assemblies where workers need to walk around the space to
gather equipment or tools to complete their tasks. However, waste of
movement can be even more niche than this. Imagine a worker at a fixed
station on an assembly line who needs to use three different tools each day. If
this worker needs to bend down for one of these tools each time, then this may
slow the process; even only slightly. Moreover, after half a day of bending
down for this tool the worker could be tired or feel sore – reducing their output
or engagement with the task.
In a bar environment, you may see speed-rails where the most popular spirits
are kept at the front of the bar, just out of sight of the customer. When the
customer asks for a drink, the bartender does not need to turn around and find
the spirit, they simply pull out the bottle which is already in front of them and
pour. This small change reduces the time it takes to serve each drink
significantly, raising the bartender’s productivity. In a quiet bar this would go
unnoticed, but in a busy nightclub it could drastically increase sales.

What is it?

 Excessive movement by workers in the production process

 The human element of production flows

What causes it?

 Poorly designed production facilities

 Non-standardized production processes
 Unclear flows of materials, down to either poor operational management
or poor training

How do we fix it?

 Assembly lines can minimize worker movements

 Clear categorization and availability of needed tools or equipment
 Effective training procedures and easily accessible and
actionable standard operating procedures
Waste of making defective products

Anyone involved in the manufacturing of physical products knows about the

ongoing battle against defects. The world of Six Sigma is built around the idea
that reducing defects is a hugely important route to improving quality. When
operating at scale, small percentage decreases of defective output can result in
large financial gains. However, it is not only industrial and manufacturing
sectors which benefit from viewing their business output from the perspective
of defects. In other industries it is possible to identify common defects in
output and design a process which highlights the need for further inspection
into these common defects before delivery, or during the task itself.

What is it?

 Wasted processing efforts on defective products

 Wasted materials on defective products
 Wasted processing on attempts to rework or repair defective products

What causes it?

 Poor management of the production processes

 Inadequate suppliers or third party production elements
 Unclear specifications and poor manufacturing documentation

How do we fix it?

 Avoid segmenting quality control departmentally; quality control can

benefit from a holistic perspective
 Use techniques like the DMAIC process and other Six Sigma
methodologies to tackle defects
 Make sure workers are appropriately trained and standardized
processes are being adequately followed

Waste of underutilized workers

Source

This final waste is not one of the classics, but I support the call from
McDonald Consulting Group and others to add it to the list.

Increasingly in Western nations we have high skilled individuals with

significant training undertaking tasks which a machine could do. Those staff
could be focusing on the high-value tasks which they want to do, can do, and
contribute most to the business. Beyond this, it benefits to involve process
users in the creation of processes as they are able to provide valuable insight
into the day to day use of a process; particularly useful in process
optimization.

Workers who feel like they have ownership over the processes they use are
likely to engage with those processes more and provide better output.

What is it?

 Not applying a worker’s talent or abilities effectively

 Not benefiting from the collective knowledge of a team
 Wasting skilled labor hours on tasks which could reasonably be
automated

What causes it?

 Poor company communication and consultation with staff

 Overly bureaucratic hierarchies which impose standards or techniques on
teams which could give valuable input
 The failure to utilize simple technological solutions to reduce data entry
and other low-skill labor-intensive tasks

How do we fix it?

 Involve process users in the design stages of process documentation

 Provide internal process-facing staff who can work across different
departments or organizational layers

5S technique of eliminating waste :

5S is a philosophy, a way of thinking which focuses on organizing and

managing the workspace by eliminating 7 Wastes while
improving quality and safety.
The 5S list describes how to organize a work space for efficiency and
effectiveness by identifying and storing the items used, maintaining the area
and items, and sustaining the new order. The decision-making process usually
comes from a dialogue about standardization, which builds understanding
among employees of how they should do the work.
There are five primary 5S phases which are known as:
1 - Sort
1.1. Identify all items in the work area

1.2. Distinguish between essential and non-essential items

1.3. Place any non-essential item in a appropriate place, not in the work area

1.4. Regularly check that only essential items are in the work area

2 - Straighten
2.1. Identify the best location for each essential item

2.2. Place each essential item in its assigned location

2.3. After use immediately return each essential item to its assigned location

2.4. Regularly check that each essential item is in its assigned location

3 - Shine
3.1. Keep the work area clean and tidy at all times

3.2. Conduct regular housekeeping activities during shift

3.3. Ensure the work area is neat, clean and tidy at both beginning and end of
shift

4 - Standardize
4.1. Follow procedures

4.2. Follow checklists for activities where available

4.3. Keep the work area to specified standard

5 - Sustain
5.1. Clean up after completion of job and before commencing next job or end
of shift

5.2. Identify situations where compliance to standards is unlikely and take

actions specified in procedures

5.3. Inspect work area regularly for compliance to specified standard

5.4. Recommend improvements to lift the level of compliance in the

workplace

Everyone and all types of business benefit from having a 5S program.

Manufacturing and industrial plants are first to come to mind and can realize
the greatest benefits. However, any type of business, from a retail store to a
power plant — from hospitals to television stations — all types of businesses,
and all areas within a business, will realize benefits from implementing a 5S
program.
The Benefits of 5S

 Reduced changeover time

 Decrease in flow distance
 Increased floor space
 Greater self-esteem
 Improvement of communication
 Increase in productivity
 Fast work
 Improved appearance of the facility and expectation for compliance to maintain
that condition
 Better and constant quality of products, services
 Reduced equipment breakdowns
 Improves workplace safety
 Fewer hazards
 Clean work place
 Reduction in materials handling
 Reduced lead time and cycle time
 Reduced search time
 Establishes standards for operating equipment and conducting processes Less
spending on replacing lost or damaged items
 Less stress and tiredness
 Improved morale and pride in the workplace
 Training time reduced for new employees
 Greater efficiency in achieving goals
 Greater readiness for new tasks
 Better impression on clients
5S Summary

5S is a process and method for creating and maintaining an organized, clean,

and high performance workplace.

5S enables anyone to distinguish between normal and

abnormal conditions at a glance.

5S is the foundation for continuous improvement, zero

defects, cost reduction, and a safe work area.

5S is a systematic way to improve the workplace, our

processes, and our products through production line employee involvement.
5S is accomplished by following all of the steps. DO NOT SKIP A STEP.
5S must become part of everyone's job.

5S is a team-oriented process between the members of the work area.

To review, some of the benefits of 5S include:

• Improved safety
• A clean, orderly workplace
• Improved efficiency
• Increased employee morale
• Standardized work methods .

Lean production :
Lean production is a production methodology focused on eliminating waste,
where waste is defined as anything that does not add value for the customer.
Although Lean's heritage is manufacturing, it is applicable to all types of
organisation and all an organisation's processes.

It is a systematic manufacturing method used for eliminating waste within the

manufacturing system. It takes into account the waste generated from uneven
workloads and overburden and then reduces them in order to increase value and
reduce costs. The word ”lean” in the term simply means no excess, so lean
production can be translated simply into minimal waste manufacturing.
is centered on determining what activities or processes add value by reducing other
aspects such as lessening the production of a certain kind of product that gives less
value and using the resources to produce more of another, while at the same time
lessening waste. It is a management philosophy that was adopted from the Toyota
Production System (TPS) created by Taiichi Ohno.

Lean production is all about reducing waste, not just material waste, but labor and
time waste generated by some processes. When all of these wastes have been
removed from the system, only then can it be said that the system is truly lean and
optimized. In short, lean production involves constant efforts to reduce or eliminate
waste starting from the design process to the manufacturing, distribution and
towards the product support and beyond phases. But it is not just about reducing
waste and overhead, the principle of lean production is also about increasing speed,
efficiency and improving quality on top of waste elimination. This requires work
and the development of a lean culture within the workforce, which ultimately leads
to added value both for the customer and the company.
Lean manufacturing is a production process based on an ideology of
maximising productivity while simultaneously minimising waste within a
manufacturing operation. The lean principle sees waste is anything that
doesn’t add value that the customers are willing to pay for.

The benefits of lean manufacturing include reduced lead times and operating
costs and improved product quality.

Also known as lean production, the methodology is based on a specific

manufacturing principles that have influenced production systems across the world
as well as those of other industries including healthcare, software and various
service industries.

5 Principles of Lean manufacturing

The five core principles of lean manufacturing are defined as value, the value
stream, flow, pull and perfection. These are now used as the basis to implement
lean.

1. Value: Value is determined from the perspective of the customer and relates to
how much they are willing to pay for products or services. This value is then
created by the manufacturer or service provider who should seek to eliminate
waste and costs to meet the optimal price for the customer while also maximising
profits.

2. Map the Value Stream: This principle involves analysing the materials and
other resources required to produce a product or service with the aim of identifying
waste and improvements. The value stream covers the entire lifecycle of a product,
from raw materials to disposal. Each stage of the production cycle needs to be
examined for waste and anything that doesn’t add value should be removed. Chain
alignment is often recommended as a means to achieve this step.

Modern manufacturing streams are often complex, requiring the combined efforts
of engineers, scientists, designers and more, with the actual manufacturing of a
physical product being just one part of a wider stream of work.

3. Create Flow: Creating flow is about removing functional barriers to improve

lead times. This ensures that processes flow smoothly and can be undertaken with
minimal delay or other waste. Interrupted and disharmonious production processes
incur costs and creating flow means ensuring a constant stream for the production
or service delivery.

4. Establish a Pull System: A pull system works by only commencing work when
there is demand. This is the opposite of push systems, which are used in
manufacturing resource planning (MRP) systems. Push systems determine
inventories in advance with production set to meet these sales or production
forecasts. However, due to the inaccuracy of many forecasts, this can result in
either too much or not enough of a product being produced to meet demand. This
can lead to additional warehousing costs, disrupted schedules or poor customer
satisfaction. A pull system only acts when there is demand and relies on flexibility,
communication and efficient processes to be successfully achieved.

The pull system can involve teams only moving onto new tasks as the previous
steps have been completed, allowing the team to adapt to challenges as they arise
in the knowledge that the prior work is mostly still applicable to delivering the
product or service.

5. Perfection: The pursuit of perfection via continued process improvements is

also known as ‘Kaizen’ as created by Toyota Motor Corporation founder Kiichiro
Toyoda (see ‘When and Who Invented Lean Manufacturing?’ above). Lean
manufacturing requires ongoing assessment and improvement of processes and
procedures to continually eliminate waste in an effort to find the perfect system for
the value stream. To make a meaningful and lasting difference, the notion of
continuous improvement should be integrated through the culture of an
organisation and requires the measurement of metrics such as lead-times,
production cycles, throughput and cumulative flow.

It is important for the culture of continuous improvement to filter through all levels
of an organisation, from team members and project managers right up to the
executive level, to create a collective responsibility for improvement and value
creation.

The 8 Wastes of Lean Manufacturing

The Toyota Production System originally detailed seven wastes that don’t provide
value to the customer. These wastes were:

 Unnecessary transportation
 Excess inventory
 Unnecessary movement of people, equipment or machinery
 Waiting – either people or idle equipment
 Over-production of a product
 Over processing or adding unnecessary features to a product
 Defects that require costly correction

An eighth waste has since been highlighted by many lean practitioners:

 Unused talent and ingenuity

Advantages and Disadvantages

Lean manufacturing carries several advantages and disadvantages depending on

how and where it is implemented.

Advantages:

1. Saves Time and Money

Cost-saving is the most obvious advantage of lean manufacture. More efficient

workflows, resource allocation, production and storage can benefit businesses
regardless of size or output. Time saving allows for reduced lead times and better
service in providing products quickly to customers, but can also help save money
through allowing for a more streamlined workforce.

2. Environmentally Friendly

Reducing waste in time and resources and removing unnecessary processes can
save the costs in energy and fuel use. This has an obvious environmental benefit,
as does the use of more energy efficient equipment, which can also offer cost
savings.

3. Improved Customer Satisfaction

Improving the delivery of a product or service, at the right cost, to a customer

improves customer satisfaction. This is essential to business success as happy
customers are more likely to return or recommend your product or service to
others.

Disadvantages:
1. Employee Safety and Wellbeing

Critics of lean argue that it can ignore employee safety and wellbeing. By
focussing on removing waste and streamlining procedures it is possible to overlook
the stresses placed on employees who are given little margin for error in the
workplace. Lean has been compared to 19th Century scientific management
techniques that were fought against by labour reforms and believed obsolete by the
1930s.

2. Hinders Future Development

Lean manufacturing’s inherent focus on cutting waste can lead management to cut
areas of a company that are not deemed essential to current strategy. However,
these may be important to a company’s legacy and future development. Lean can
create an over-focus on the present and disregard the future.

3. Difficult to Standardise

Some critics point out that lean manufacturing is a culture rather than a set method,
meaning that it is impossible to create a standard lean production model. This can
create a perception that lean is a loose and vague technique rather than a robust
one.

What is an Example of Lean Manufacturing?

Lean manufacturing is used across industry for a variety of production processes,

although notably, it was first seen within the automotive industry.

Creating efficient workflows and processes is important to maximising output on a

production line, which in itself harks back to Adam Smith’s 1776 ‘Division of
Labour,’ where he noted how the efficiency of production was vastly improved if
workers were split up and given different roles in the making of pins. This was
because workers could be tasked with work that suited their skills or temperament,
there was no need to move them from their stations or for them to learn different
skills or swap tools.

Lean manufacturing has drawn on these ideas and extended them to include
removing waste from multiple processes and procedures. Lean methods can also be
seen outside of production with the provision of services too.
How Can Lean Manufacturing be Implemented?

The general meaning of lean is to identify and eliminate waste, from which quality
and production times can be improved and costs reduced. This is one method of
approaching lean manufacturing, but it can also be approached using the ‘Toyota
Way,’ which is to focus on improving workflows rather than waste.

Both methods have the same goals, but with the Toyota Way the waste is
eliminated naturally rather than being sought out as the focus. Followers of this
method of implementation say it is a system-wide perspective that can benefit an
entire business rather than just removing particular wastes. The Toyota Way seeks
to simplify the operational structure of an organisation in order to be able to
understand and manage the work environment. This method also uses mentoring
known as ‘Senpai and Kohai’ (Senior and Junior) to help foster lean thinking right
through an organisational structure.

However, despite the different approaches both methods share a number of

principles, including:

 Automation
 Continuous Improvement
 Flexibility
 Load Levelling
 Perfect First-Time Production or Service Quality
 Production Flow and Visual Control
 Pull Processing
 Supplier Relationships
 Waste Removal