I’ve become very interested in Lean Manufacturing and the Toyota Production System. Both are ways for companies to use their internal strengths to dramatically improve throughput and profitability.
In the book The Toyota Way I found eight things Toyota finds wasteful. These eight things can easily be applied to any business that I’ve run across. The eight areas of waste are:
- Over production – Producing for inventory is often wasteful. Just to have things in the wings, incase we need them are common thoughts many businesses have. When we keep things in the wings, we often end up throwing them away.
- Waiting – This can be waiting for anything. Waiting for people to arrive for appointments or waiting for material to arrive so we can work on it. Balancing how our work flows is an important part of doing things effectively and efficiently.
- Unnecessary Transport – Does your company move things around so there is room to work? Are you moving things from one warehouse to another because there isn’t enough room? If either of these is true you might be wasting time and effort just moving stuff around.
- Over processing – Are you spending too much time working things and then working them again? Over processing can be caused by not doing it correctly the first time or working to tolerances that are more than you need. Sometimes perfect isn’t necessary.
- Excess Inventory – This is always a giant waste. Excess inventory often turns into scrap or items that are out of date and have to be heavily discounted. Too much inventory gets in the way and causes everyone to go more slowly than necessary.
- Unnecessary movement – Is the work in your company set up so people have unnecessary movements? If the answer is yes then your efficiency is going to be reduced. Whether it’s moving paper on your desk or products on a manufacturing floor excess movement is wasteful.
- Defects – Re-work is the enemy of efficiency. Planning for doing it right the first time helps reduce waste and make your company more efficient. Employees don’t like doing things more than once. Putting systems in place that allow work to be done properly the first time makes your company more efficient.
- Unused employee creativity – This is the biggest one on the list. We have a tremendous amount of brainpower in our companies that we don’t use. Our employees are creative. If we don’t tap into that creativity we’re doing both our companies and our employees a big disservice.
This is Toyota’s big eight, what’s yours?
Part of getting rid of waste is having a simple budgeting process. I’ve written a special report on four tiered budgeting. Click on the button below and you’ll be able to get this complementary report.