The Seven Wastes

1. The Seven Wastes Improving organizational performance in Minnesota state government

2. Understanding Value, Waste and Flow Are you living on Golden Pond or the ‘Big Muddy’

3. ValueAre we adding value, or just doing stuff?

4. It is a task or action that a customer would be willing to pay for It transforms a product or service It is done correctly the first time It’s an activity that consumes resources without directly creating value for the customer It is an activity that is unpredictable in creating value It’s an activity that requires more time, effort, or resource than it has to. Value added vs non-value added

5. Request Delivery Non-value Added Value Added 1 Typical Timeline Typically, less than 1% of a time that we own a product or service is spent adding value.

6. Can you see the waste?

7. Reducing non-value The Seven Wastes

8. The seven wastes + 1 • Defects (poor quality) • Transportation • Waiting • Overproduction • Inventory • Motion • Extra processing • Underutilized creativity

9. Defects Any element of a product or service that does not meet or exceed a key customer requirement.

10. Defects cause…… • Re-work • Re-inspection • Bottlenecks and backlogs • Extra work and stress • Unhappy customers

11. Defects are not always so obvious

12. Transportation The movement of information or materials between tasks in the process.

13. Follow the bouncing paperwork

14. Waiting People, parts, systems, or facilities waiting for a work cycle upstream to be completed.

15. Factoid About 95% of the time that is required to produce a product or service is because of waiting.

16. A fool’s choice • “We can either do it fast, or we can do it right” • The truth is the longer is takes to do something, the more opportunity there is for defects, errors, waste and rework. This increases the time to do something, which means more defects, errors and waste. (A prototypical Catch 22)

17. 1 Request Delivery

18. 1 Request Delivery We eliminate the waste so we use our resources to do the work that our customer pays us for.

19. Overproduction Producing products or services faster than your customers are using them requires: • more movement • more storage • more capital tied up in inventory • more resources to track inventory

20. Office examples of overproduction • We need 54 copies, but we make 60, just in case. • We print 5000 brochures because the price per piece is cheaper, we inventory, store and finally recycle 2/3 of them. • We print and distribute forms that frequently change.

21. Storage or inventory • Storing information or materials in multiple places • Storing information longer than necessary (retention policies) • Creating and storing more copies than are necessary

22. Motion Any movement of peoples’ bodies that does not add value to product or service

23. How about this one? Where should this item be located? 50 Frequency of gets and put-aways Times/Day 40 30 20 10 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Distance Carried (feet) - Frequency of Use Analysis Physical Files 1

24. 7 Before End 2 4 3 1 Start 6 5 Mail File File 1 4 7 File Review 2 5 Issuer Mail 3 6

25. After Issuance Work Area 2 2 1 3 3/4 Mail 1 Issuers/depositors 2 Quality 3 Helptracking 4

26. Extra processing • Multiple inspections (no quality at the source) • Multiple signatures/authorizations • Different ways to produce the same product (no standard work) • Batching work

27. Underutilized creativity • People who work in the process, know the process best (both the strengths and weaknesses). • Do they have the tools, training, and permission to systematically improve their process?

28. Improving work flow Searching forLean nirvana Orienting your workplace, and adjusting your work tasks, so that the product or service is always in a state of constant value added

29. Obstacles to continuous flow • Bottlenecks –which step(s) in the process constrains the throughput? • Backlogs – backlogs create additional work for those in process • Low first pass yield – high percentage of work sent back to a previous step in the process • Batching – waiting until we have a certain number of certain items before we take action • Production capacity that does not allow continuous flow (Takt time) • Poor sequence of steps

30. Process definitions • Cycle time – amount of uninterrupted time needed to complete a particular task • Lead or elapsed time – the amount of time needed to complete one ‘widget’ • Takt time – the rate at which your customers require their widget (#/day)

31. Where is the bottleneck?

32. …sizing your operation so supply matches demand

33. TAKT time – the average rate at which the customer consumes or requires the product or service (i.e. #/day or #/hour).“We receive 500 requests for payment every day”Takt time = net work hours per day 500 requests

34. Takt time Takt time=54 sec What does the chart tell you?

35. Producing products; services faster than a customer requires means extra movement, storage, inventory, waiting, etc. Producing products; services slower than a customer requires means dissatisfaction, backlogs, need for expedited processes, stress, etc.