In this module, we concentrate on improving the clarity and understanding of some of the key definitions of Continuous Improvement (Lean Six Sigma).
No matter how sophisticated the tools, principles, or methodologies are, you are always going to come back to these important definitions. These definitions are the backbone of a successful Continuous Improvement program and deployment. They may sound simple but they will provide the perfect framework to battle some of the more harmful practices of any organization.
Let’s start with “Waste” also known by the Japanese as “Muda”. In order to do that we need to take a step back and define “Value” and who defines “Value” within any organization.
Understanding Waste
Value-Added vs. Non-Value Added
Value-Added Activity
Activity that transforms or shapes raw material or information to meet true customer requirements.
Non-Value Added Activity
Activities that take time, resources, or space, but do not transform, or add to the customer’s desired, perceived value of a product, process, or service.
Now that we have a better understanding of what waste means, let’s take a look at the type of waste classified and identified by Toyota. It is important to highlight that all the organizations have waste, what is going to give organizations a competitive advantage is the ability to systematically remove and eliminate waste.
We highly recommend you to remember T.I.M. W. W.O.O.D., this will help you always be alert to spot and identify waste within your area or across your organization.
The Origin of MUDA (Waste)
T- Transportation
- Unnecessary transportation of parts, materials, or information around the production floor or office
I – Inventory
- Excess supply of parts, material or information for a one-piece flow process
M – Motion
- Movement of people or equipment that does not add value to the process of “moving without working”
P – People (Underutilized)
- The waste of not using people’s full abilities (mental, creative, physical, skill)
W – Waiting
- Wait time due to something or someone before being able to proceed to the next step of the process
O – Overproduction
- Making more of or earlier than required by the next step of the process
O – Over-processing
- Act of redundancy; filling out the same information, tweaking/adjusting, and approvals
D – Defects
- Any information, material, or product that requires correction, rework, or repair
As we mentioned before, it is not enough for organizations to know that waste is probably everywhere. Instead is very important to define a clear roadmap that will tell staff what is the right thing to do when waste is identified. The following graphic will help you send a clear message about what to do when you have identified waste.
The first division between value-added and non-value-added activities will help the organization guard against people justifying or finding excuses for activities that they see as necessary to do. They may be necessary but still many will fall under the non-value-added category. For example, somebody could argue that adding approvals to a process is necessary, but typically approval is something that a customer is not willing to pay, since it usually has to do with a lack of trust in the internal areas of departments within an organization. That will force the organization to find ways to reduce the number of approvals and time that staff is spending completing those types of activities.
- Examples
- Key Reflection Questions (included in participant guide)
- Now that you have a better understanding of what value add vs non-value added is,
- Who would you consider that are the main customers of the products, processes or services that you are a part of?
- What are some of the activities within your organization that you think add value to your customers?
- What are some of the activities within your organization that don’t add value to your customers?
- Other Resources
- Article. Added Value Definition
- Article. Waste Elimination