Total Productive Maintenance

7 Wastes of Production

7 Wastes of Production

Taiichi Ohno defined the 7 types of waste that describe all activity that adds cost but not value. In a Lean Enterprise these 7 types of “Muda” are the target of an endless pursuit of waste elimination. Learning to see “Muda” all around you is the key to starting out on your journey of transforming your organization into a Lean Enterprise.

The 7 Wastes – “Muda”	Definition	Examples	Causes	Countermeasures
Overproduction	Producing more than the customer needs right now	Producing product to stock based on sales forecasts Producing more to avoid set-ups Batch process resulting in extra output	Forecasting Long set-ups “Just in case” for breakdowns	Pull system scheduling Heijunka – level loading Set-up reduction TPM
Transportation	Movement of product that does not add value	Moving parts in and out of storage Moving material from one workstation to another	Batch production Push production Storage Functional layout	Flow lines Pull system Value Stream organizations Kanban
Motion	Movement of people that does not add value	Searching for parts, tools, prints, etc. Sorting through materials Reaching for tools Lifting boxes of parts	Workplace disorganization Missing items Poor workstation design Unsafe work area	5S Point of Use Storage Water Spider One-piece flow Workstation design
Waiting	Idle time created when material, information, people, or equipment is not ready	Waiting for parts Waiting for prints Waiting for inspection Waiting for machines Waiting for information Waiting for machine repair	Push production Work imbalance Centralized inspection Order entry delays Lack of priority Lack of communication	Downstream pull Takt time production In-process gauging Jidoka Office Kaizen TPM
Processing	Effort that adds no value from the customer’s viewpoint	Multiple cleaning of parts Paperwork Over-tight tolerances Awkward tool or part design	Delay between processing Push system Customer voice not understood Designs “thrown over the wall”	Flow lines One-piece pull Office Kaizen 3P Lean Design
Inventory	More materials, parts, or products on hand than the customer needs right now	Raw materials Work in process Finished goods Consumable supplies Purchased components	Supplier lead-times Lack of flow Long set-ups Long lead-times Paperwork in process Lack of ordering procedure	External kanban Supplier development One-piece flow lines Set-up reduction Internal kanban
Defects	Work that contains errors, rework, mistakes or lacks something necessary	Scrap Rework Defects Correction Field failure Variation Missing parts	Process failure Mis-loaded part Batch process Inspect-in quality Incapable machines	GembaSigma Pokayoke One-piece pull Built-in quality 3P Jidoka

Balanced Scorecard

Balanced Scorecard Put your visions into practice

What is Balanced Scorecard? Balanced Scorecard (BSC) is a concept helping you translate strategy into action. BSC start s from the company vision and strategies, from here critical success factors are defined. Measures are constructed that aid target-setting and performance measurement in areas critical to the strategies. Hence, Balanced Scorecard is a performance measurement system, derived from vision and strategy, and reflecting the most important aspects of the business. The Balanced Scorecard (BSC) concept supports strategic planning and implementation by federating the actions of all parts of an organization around a common understanding of its goals, and by facilitating the assessment and upgrade of strategy. Traditional performance measurement, focusing on external accounting data, was quickly becoming obsolete and something more was needed to provide the information age enterprises with efficient planning tools. For t his purpose Kaplan & Norton introduced four different perspectives from which a company's activity can be evaluated: Financial perspective (how do we perceive our shareholders?) Customer perspective (how do we perceive our customers?) Process perspective (in what processes should we excel to succeed?) Learning and innovation perspective (how will we sustain our ability to change and improve?)

Figure 1: Create a Balanced Scorecard: You have to identify a vision. Where is the organization going? By identifying strategies you learn about how you will get there. Define Critical Success Factors and perspectives, which means you have to ask what do we have to do well in each perspective. Thereafter ask how do we measure that everything is going the expected way? Then it is necessary think about evaluating your Scorecard. Consider how do we ensure that we are measuring the right things? Based on this work you should create action plans and plan reporting and operation of the Scorecard. How do we manage the Scorecard? Which persons should have reports and what should the reports look like?

Figure 2: The picture shows a very general example of a Scorecard. Where are we going? The vision: "We should dominate the market." How? By focusing on cost efficiency, high quality and by investing in new technologies. In which perspectives should we excel at what? Responsibilities and action plans for achieving targets set are defined. You can easily create a Scorecard, but to create a manageable scorecard is a completely different thing!

Benefits The benefits of applying Balanced Scorecard can be summarized as follows: Balanced Scorecard helps align key performance measures with strategy at all levels of an organization. Balanced Scorecard provides management with a comprehensive picture of business operations. The methodology facilitates communication and understanding of business goals and strategies at all levels of an organization. The balanced scorecard concept provides strategic feedback and learning.