Waste [MUDA]

Non-Value-Added Activities

A process step is defined as value-added if:

• Customer recognizes its value
• Is willing to pay for the process step
• The process step  "changes" or "transforms" the product
• Is done the Right for time

NVA are those activities that the customer is not willing to pay for or those that DO NOT change or transform the product or service.

The NVAs are MUDA.

8 Types of Wastes

1. Defects
2. Overproduction
3. Waiting
4. Non-utilized skills
5. Transportation
6. Inventory
7. Motion
8. Excess processing

In the service industry:

Type of waste	What is it?	Examples
Waste of Over-production	Processing too soon or too much than required	• Information sent automatically even when not required • Printing documents before they are required • Processing items before they are required by the next person in the process
Waste of Defects	Errors, mistakes and rework	• Rejections in sourcing applications • Incorrect data entry • Incorrect name printed on a credit card • Surgical errors
Waste of Inventory	Holding inventory (material and information) more than required	• Files and documents waiting to be processed • Excess promotional material sent to the market • Overstocked medicines in a hospital • More servers than required
Waste of Over-Processing	Processing more than required wherein a simple approach would have done	• Too much paperwork for a mortgage loan • Same data required in a number of places in an application form • Follow-ups and costs associated with coordination • Too many approvals • Multiple MIS reports
Waste of Transportation	Movement of items more than required resulting in wasted efforts and energy and adding to cost	• Movement of files and documents from one location to another • Excessive e-mail attachments • Multiple hand-offs
Waste of Waiting	Employees and customers waiting	• Customers waiting to be served by a contact center • Queue in a grocery store • Patients waiting for a doctor at a clinic • System downtime
Waste of Motion	Movement of people that does not add value	• Looking for data and information • Looking for surgical instruments • Movement of people to and fro from filing, fax and Xerox machines
Waste of Un-utilized People	Employees not leveraged to their own potential	• Limited authority and responsibility • Managers common • Person put on a wrong job
Waste of Over-production	Processing too soon or too much than required	• Information sent automatically even when not required • Printing documents before they are required • Processing items before they are required by the next person in the process
Waste of Defects	Errors, mistakes and rework	• Rejections in sourcing applications • Incorrect data entry • Incorrect name printed on a credit card • Surgical errors

5S (Lean Tool)

5S is a workplace organization method that can help improve the efficiency and management of operations. 

• SORT (SEIRI) -- Sort thru the items as required and remove unneeded items from work area. Never used items need to be discarded immediately.
• SET IN ORDER (SEITON) -- Arrange required items for ease of accessibility. Files that are required more often (SOP, instructions etc.) are placed in marked location / designated area. 
• SHINE (SEISO) -- Cleaning the work area and equipment. (Manufacturing example - cleaning of inspection surface plates leads to better measurement results). Other e.g. equipment work table cleaning and cleaning of the floor.
• STANDARDIZE (SEIKETSU) - Involves developing checklists, standards, and work instructions to keep the work area in an orderly condition. 
• SUSTAIN (SHITSUKE) - Sustaining efforts and continuing them (continuous improvement). Requires support of team and that of management, empowerment of employees, etc.  

> A process is impacted by its environment

> The ability of employees to process change is also impacted by its environment

> Improvement in the work area is helpful for controlling the process.

5S Example in a Service-based Industry

• CEO asks for progress update on existing cost improvement initiatives.
• PMO shares a comprehensive report spending 80 hours and at least two loops. 
• CEO unhappy. 
• 5S is deployed. 
• Existing report looked at
• Sorted existing reports based on stakeholder requirements - high, med, low
• What type of data was being collected, and how it was collected for the report. Was being done manually, and in various formats.
• The improvement team "sorted" the available information as inputs to fulfill the requirements. 
• Set in order - Created input screen from where PMO could add his details, and the PMs can collect data and upload their reports. 
• Created reports in Tableau. 
• Shine - identified 5PMs and executed a pilot. 
• Standardize - Created training material, SOPs, maintenance procedures, 
• Sustain - for 2 months. 
• 
  

Value Stream Map...

A value stream map is a lean technique used to document, analyze, and improve the flow of information or materials required to produce a product or service for a customer. 

> Identify and eliminate waste

> Review the flow of process steps and information from origin to delivery

> Has a system of symbols to depict various work activities and information flows

Value Stream Map extends on the Process Map

A process map is a work that should ideally happen as part of the process on the floor, whereas a value stream map is what actually happens. 

• NVA - Non-value-added work - actions that should be eliminated. 
• ENVA - Essential non-value-added work - wasteful actions but essential under operating procedures. 
• VA - Value Added work - Actions that add value to the work. 

1. Add time for each activity
2. Calculate total time
3. Calculate Total value-added time 
4. VA / Total Time = Process cycle efficiency (PCE) 

How to create a VSM?

Example of Pizza Delivery 

• Step 1: Identify the start and endpoints

• Step 2: Document the process steps

Next, indicate how many operators complete each step in the circle within each box. 

Next, include a data box to indicate:

1. CT or the cycle time - Time to complete each activity

2. CO - Change Over Time The time to switch between steps

3. Up Time - The percentage of time the machine is up and running. 

4. Yield - Percentage of parts that pass inspection. 

Next, indicate cycle time (CT) (shown in the diagram below). 

• Step 3: Add inventory and wait times. Connect the start and endpoints. Electronic flow lines represent customer call and electronic payment, a vertical-lined thick line is material pushed from one process to the other, and the solid thick line is shipment/delivery.

Use Inventory Triangles In between each phase to mark the number of parts in WIP. 

Add symbols at the shipment (scooter here) - to show method of shipment

• Step 4: Draw information flow:

- Draw information flow: Suppliers, Production control to represent people centrally coordinating between the suppliers and the pizza store - ensure raw material stock at pizza store doesn't' go below minimum prescribed level. 

- Then place lines of communications (straight lines (manual comms) and crooked lines)

- Add notes about the type of exchange, frequency of exchange and the media used

• Step 5: Create Timelines: 

- Finally create timelines at the bottom of the value stream map. The timelines will have three levels -- 

-- Value-added process

-- Essential non-value added process

-- Non-value added process

- Finally, add a databox at the bottom that houses - Total Cycle Time, Value Added Time and Process Cycle Efficiency

Another example of Value Stream Map (Call Centre)

Lean Enterprise Organization

• An organization that uses lean thinking
• Applies lean tools to reduce waste
• Offers value to customers

Achieving a lean enterprise requires a change in:

• Attitudes
• Procedures
• Processes
• Systems

Value Stream

• Value Stream is a series of activities. 
• Starts with the Supplier and ends at the customer. 
• Wastes are explicit and hidden along this value stream. 

Components of Value Stream

• Flow of materials
• Transformation of raw materials into finished products/services
• Flow of information