CI 101

What is knowledge waste? One of the 8 Wastes of Lean.

In my previous post, I mentioned that the heart of the lean system is people’s involvement, a highly motivated team continuously seeking the best way.  I learn this idea from Pascal Dennis on his book Lean Production Simplified, which is one of my favorite lean books.  It was in the same book, where for the first time, I learned about the nine wastes of knowledge.

Value-added activities add something, change, or transform material or information into what the customer is willing to pay for, everything else is non-value-added or waste.  Although at the beginning was seven deadly wastes, now we include the waste of knowledge to have eight categories of waste.  

Knowledge waste has different names, unused or non-utilized talent, non-utilized potential or skills, and neglect of human talent.  Regardless of what name you use, this type of waste is one of the reasons why so many companies have huge turnover rates.   In traditional management, leadership dictates orders expecting people to follow them without even questioning.  Doing that is disrespectful, it is treating people like commodities, the same way machines are treated.  

There is no surprise that for Toyota, respect is one of its core values.  Self-esteem is one of Maslow’s psychological needs, the feeling of achieving things, confidence, and respect is important to have the right level of self-esteem.  As leaders, we are responsible for actively listening, understand, motivate, teach, and influence our team.  If we fail, we are stopping the flow of knowledge, ideas, and creativity.  In other words, we are failing our team and creating a waste of knowledge.

The nine types of knowledge waste are the following.

  1. Hand-off – a separation of knowledge, responsibility, action, and feedback.
  2. Useless information – false or incorrect information
  3. Discarded knowledge – acquired knowledge or information that no longer serves the original purpose
  4. Wishful thinking – making decisions without adequate information
  5. Waiting – for information, comments, authorization
  6. Misalignment – disconnects in information or time, between departments, or within departments. 
  7. Communication barriers – culture, language and organizational culture
  8. Inadequate checking – constant follow-up, check, and balances, lack of trust
  9. Wrong tool – poor communication tools, narrow information channels

Many leaders still think that to be the boss, they need to have all the information, and hold it for themselves because the information is power. There is a lot of hidden talent in our organizations, and it is our responsibility to motivate, develop, teach, communicate, and influence our team. If we are not doing this, then we are guilty of creating a waste of knowledge. 

Waste

How can you identify the 7 types of waste?

Waste can be deceiving, learn how to identify waste in Lean

Value-added means those activities that change raw material or information into value for the customer. Any step that does not serve the purpose of providing value for the customer is non-value-added or waste. This type of activity adds cost or time but does not add value. One way to identify what areas of your business need change is by identifying waste.

For people with continuous improvement experience, it is easier to identify waste. They will see waste jumping out in front of them. For most people, finding waste is not an easy task. If you are one of those people, use the back-door method.

Waste is everywhere, and probably things that you see now as part of the process, are waste. With the back-door approach, you look for the opposite of waste, work. Work is the value-added activity in the area. When you cannot see waste, find the work, and everything else is waste!

Follow the following five points or steps while focusing on one process.

  1. Look at the three real things, the functional area, the facts, and work-in-process. Do not guess or let the emotions or company culture drive the way, use data-driven thinking. Be in the look-out for excess inventory.  
  2. Ask what the operation is about, what is the purpose of the process?
  3. Ask why the operation is necessary? Is there a better way to accomplish that purpose?
  4. Everything that is not Work is waste. Draw the process steps, and everything that does not execute the function is waste. 
  5. Ask why at least five times to find the root cause or reason for each step to exist. Ask how you can change the process. Create an improvement plan with the information gathered and execute it as soon as possible.

If you follow these steps every time, soon you will grasp the concept. It is important to understand the purpose of the area. Why the process exists and what is the value for the customer are important pieces of information for effective waste identification.

CI 101, Customer Satisfaction

What are your business goals?

One of your goals as a successful business owner is to deliver high-quality products to the customer at the lowest cost. The goal of lean or continuous improvement is to provide the customer with the highest quality, at the lowest cost, in a shorter time. It sounds to me that both goals are the same, what do you think?  

Continuous improvement achieves the goal by continuously eliminating waste, and you need to learn what it is and eliminate it. Waste is any activity that the customer is not willing to pay. They don’t have problems paying for activities that transform materials into finished goods or processed information. We call those activities value-added.  

The customer does not pay for the cost of fixing errors, waiting time, or excess inventory. These activities are non-value-added or waste, and the target of continuous improvement is to eliminate them.

Waste has seven categories: transportation, inventory, motion, waiting, over-production, over-processing, and defects. There is another category added later, which is underutilization of people’s talents.

  • Transportation is an essential part of operations, but it does not act any value from the customer perspective. The goal of CI is to minimize transportation to the minimum necessary.
  • Inventory of raw materials is also a necessary evil, but you do not want to have excess inventory. Excess inventory is at risk of being damaged or become obsolete.  
  • Any motion of a person’s body that is not related to adding value is waste. Poor ergonomic designs make people move their bodies more than necessary causing safety and productivity issues. 
  • Waiting for materials, for approvals, for a phone call, or for shared equipment to become available are all examples of waste.  
  • Over-production is when we make too much because we are producing ahead of the real demand. Over-production creates more waste in the form of inventory, motion, waiting, and others.
  • Over-processing is doing more than what the customer requires. A common example of this is when you receive items in a box that is three times the appropriate size.
  • defect is when we make a mistake, or produce defective items. Fix defective products comprise time, material, and other resources.  
  • Underutilization of people’s talents is not letting people work at their full capacity. Examples of this are lack of training, not trusting in their capacity to improve processes and siloed thinking.

You can highlight the waste on the process while drawing your process map. Make sure that you eliminate or minimize waste while designing the new process. Your strategy to increase profitability is to eliminate waste.

What are your business goals? Is one of them to deliver a high quality product at a low cost? Are you targeting to increase your business profitability? Do you want to grow your business? If you answer yes to any of the last three questions, then continuous improvement is the business strategy you are looking for. Contact me, and we will work together to improve your business processes from the customer perspective.