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Wastes of the Extended Value Stream
December
1, 2004
Most
people who have had any exposure to lean thinking have heard of “The Seven
Wastes.” Taiichi Ohno, the former
Chief Engineer at Toyota that popularized the Toyota Production System, is
responsible for identifying the seven wastes of manufacturing.
As he observed activity on the shop floor, he identified the following
wastes:
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Overproduction
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Transportation
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Unnecessary
Inventory
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Inappropriate
Processing
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Waiting
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Excess
Motion
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Defects
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In
1996 James Womack identified an eighth waste, the waste of underutilized
employees (with respect to their ideas/minds), in the book Lean Thinking.
The
idea of the lean value stream is to continuously work to eliminate the sources
of these wastes based on their relative contribution to key lean metrics.
Many organizations have reached the point in their lean journey in which
they are working to create a lean extended value stream.
That is, they would like to work on the value stream that includes their
suppliers and customers. This value
stream stretches from raw materials to the end user.
One key to successfully achieving a lean extended value stream is to
understand the types of waste one might find in the extended value stream. This article attempts to help the reader understand the
implications of the seven wastes for the extended value stream.
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Overproduction
– Overproduction simply means producing more than what is actually needed
by an upstream process or customer. On
the shop floor, this generally occurs because changeover times are high,
equipment is unreliable, the process is unreliable (causes defects), and
standard cost accounting metrics are used.
In the extended value stream, overproduction certainly occurs for
some of these same reasons. However,
probably the biggest reason for overproduction is poor information flow
(communication) between facilities. Improved
information flow between facilities is one of the key characteristics of a
lean extended value stream.
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Transportation
–
Moving product does not create value; this is amplified when examining the
extended value stream. Unnecessary
transportation is generally caused by making supplier selection decisions
based on single points in a value stream rather than seeking to optimize the
entire value stream. Proper
selection of supplier/facility location is critical to a lean value stream.
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Unnecessary
Inventory
– For the extended value stream, unnecessary inventory is generally the
result of poor information flow and batch processing.
Suppliers often hold inventory to support a lean customer; this
ultimately gets passed on to the customer in the form of higher pricing
and/or poor quality. Sometimes,
suppliers and their customers are holding redundant inventory. Extended value stream mapping will expose this waste.
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Inappropriate
Processing
– In the door-to-door value stream, this usually refers to using larger
scale equipment than necessary; it also refers to building in rework to a
process. In the extended value stream, it can also refer to using
the wrong suppliers and/or the wrong process.
With regards to rework, many times organizations rework parts after
they come in from a supplier simple because of poor communication between
facilities.
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Waiting
– This waste refers to operators waiting for machines as well as product
waiting (inventory). This waste
is generally the same for the extended value stream as the door-to-door
value stream.
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Excess
Motion-
Generally, this waste applies to production personnel having to move out of
their work area to locate tools, materials, etc.
Like the waste of waiting, this is essentially the same for the
extended value stream as the door-to-door value stream.
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Defects-
This waste refers to defective product and information (paperwork).
Its unique application to the extended value stream is defective
product moving between facilities.
This results in additional waste in the form of excess inventory and
rework.
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Underutilization
of Employees’ Minds/Ideas
– This waste could be changed to “Underutilization of Suppliers’ and
Customers’ Minds/Ideas.” Organizations
rarely approach their customers and suppliers to leverage their know-how
with respect to manufacturing processes, information processing, and product
design. This is a very
important waste of the extended value stream.
“The seven
wastes” is a powerful tool for implementing lean manufacturing in a facility.
When analyzing the extended value stream, one must consider the seven
wastes with a slightly different paradigm.
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About the Author
Darren Dolcemascolo is an
internationally recognized lecturer, author, and consultant. As Sr. Partner and
co-founder of EMS Consulting Group, he specializes in productivity and quality
improvement through lean manufacturing. Mr. Dolcemascolo has written
the book
Improving the
Extended Value Stream: Lean for the Entire Supply Chain, published by
Productivity Press in 2006. He has also been published in several
manufacturing publications and has spoken at such venues as the Lean Management
Solutions Conference, Outsourcing World Summit, Biophex, APICS, and ASQ. He has a BS in Industrial Engineering
from Columbia University and an MBA with Graduate Honors from San Diego State
University. |
