Seven Types of Process Waste

Studies show that process waste is typically 20 to 30% in manufacturing and 40 to 50% in service organizations. This is lost revenue to your business. Take a close look at these and compare it against your process, which of the following wastes does your company has/have?

Overproduction. Overproduction occurs when operations continue after they should have stopped. The results of overproduction are the products being produced in excess of what’s required, products being made too early, and excess inventory carrying costs.

Waiting. Also known as queuing, waiting refers to the periods of inactivity in a downstream process that results when an upstream activity does not deliver on time.
Idle downstream resources are then often used in activities that either don’t add value or result in overproduction.

Motion. This term refers to the extra steps taken by employees and equipment to accommodate inefficient process layout, defects, reprocessing, overproduction or excess inventory. Motion takes time and adds no value to the product or service.

Defects. These are products or services that do not conform to the specification or Customer’s expectation, thus causing Customer dissatisfaction. The results of defects are reduced profits; rework; Employee frustration, aside from customer dissatisfaction.

Transport. This is unnecessary motion or movement of materials, such as work-in-process (WIP) being transported from one operation to another. Transport should be minimized because it adds time to the process during which no value-added activity is being performed and cost for handling damage could be incurred.

Extra Processing. This term refers to extra operations, such as rework, reprocessing, handling or storage that occurs because of defects, overproduction or excess inventory.

Inventory. This refers to inventory that is not directly required to fulfill current Customer orders. Inventory includes raw materials, work-in-process and finished goods. The results of inventory are: All inventory requires additional handling and space; reduced cash flow.