One of the core principle of lean is to create uninterrupted flow1. To do that, we need to minimise the waste (non-value) in the process. Enterprises should seek to maximise the value add to their customer. In most processes, only 3-5% of the steps actually create value. Using the example of a hammer striking the nail. The “value” is only in the split second when the hammer impacted the nail. The rest of the motion are categorised as waste in Lean.
If the particular step in the process is of value to the customer, they should be able to “feel” the
improvement that is being done there2. Value to the customer is:
Give me exactly what I want
Deliver value where I want it
Deliver value when I want it
Solve my problem completely
Reduce the number of decisions I have to take to solve my problems
Don’t waste my time
Another 20-35% of the steps in the process are necessary but does not create value, such as compliance to regulatory requirements, accounting and payroll. They does not add value to the customer but enabled the delivery of value. These should be minimised as far as possible.
That leaves the remaining 60% as pure waste in a process to be eliminated. Broadly, waste can be categorised into 7 types, and it is more significant in an office environment as they are often invisible and of bigger financial impact than on the shop floor.
7 types of waste:
1. Over production
2. Inventory or WIP (work in process)
3. Motion or movement
4. Transportation of goods (conveyance)
5. Defects, Errors or Inaccuracy, including rework (Hidden factory)
7. Over process
Before any automation, it is highly desirable to analyse your process flow for the value and non-value (waste) components, usually through value stream mapping (VSM) technique. It will be costly and pointless exercise to automate non-value steps. In the next article, more will be elaborated on these wastes, with examples from the service environment and the possible counter measures.
- Mark Tan, Senior Manager,
Technology, Innovation and Enterprise Hub, Singapore Institute of Technology -
1 Lean Thinking Banish Waste and Create Wealth in Your Corporation, by James P Womack and Daniel T Jones, July 2003
2 Lean Solutions: How Companies and Customers Can Create Value and Wealth Together, by James P Womack and Daniel T Jones, June 2007