Chapter 1

Eliminating Waste

Unfortunately there is too much waste in our work environment. While we talk constantly about the difficulties in making money, we tend to ignore the waste that surrounds us and to overlook opportunities for improvement.

We tend to look at time as something that adds value. Job experience, for example, is considered a function of time based on accumulated experiences or hours spent in producing goods. Instead, we should view time as something that erodes value when it is misspent. We should take specific actions to accelerate the improvement of operations and thereby run our workplaces more efficiently -- so that we can move forward.

Scenes in the Factory

Before talking about what we can or should do to improve our workplaces, let us first get a few comments from the people in the factory:

Shop foreman: "Most of our people are working very hard. We are doing everything possible to improve our practice here. It just takes time for us to get to where we want to be."

Plant manager: "We have many things going on in our factory. We are doing SPC [statistical process control] training and quality circle activities. We have implemented a suggestion program. We have MRP [material requirements planning]. We have even introduced robotics and an automated warehouse. But somehow, I have a feeling that things are not going well. For example, the number of suggestions is low, machines are still breaking down, quality level is not as high as I want to see it, sudden schedule changes are still common, and so on. Because of these things, I spend too much time chasing fires and attending daily meetings."

Chief executive officer: "I don't know what's going wrong. I have attended seminars and conferences; I have looked around and hired consultants for help. But what I have accumulated so far are lots of documents, papers, fragments of thoughts, and so on. Somehow I haven't been able to integrate them into a plan of action yet."

These are comments I hear quite often. People are concerned about day-to-day problems, fires in the factory, and the like. They are attending seminars and reading about new management techniques. But they are missing something they need to know, and they feel confused. Perhaps there is even feeling of resignation (or satisfaction) that people have done their best and cannot do better.

While developing an integrated understanding and setting priorities are important processes in our work, a fundamental question is whether we have spent enough time finding out what's really happening on the factory floor. So, let us spend some time here to review some typical operations found in the factory.

In one area, we see an operator carrying a heavy workpiece by hand. In another area, we see people working frantically to stay on schedule after finding that an entire batch produced a few hours earlier was out of tolerance. We also see people watching a machine run, sorting good parts and bad parts, waiting for the delivery of material, stacking up inventory, and fixing machine breakdowns. When we check the way people are producing, we find they may be working just because materials are there to work on, rather than following certain prescribed procedures or disciplines (see Exhibit 1.1).

We need to ask ourselves "How many of these activities are absolutely necessary for our production activities?" and "How many of these activities are adding value to the product -- rather than cost?" Or we might ask ourselves, "how many of these activities are related to things the customer sees and cares about?"

Waste

Fujio Cho of Toyota defines waste as "anything other than the minimum amount of equipment, materials, parts, space, and worker's time, which are absolutely essential to add value to the product." As early as the 1920s Henry Ford was concerned with the problem of waste. He discussed it specifically in his book Today and Tomorrow, which Toyota people diligently studied later. To put it in simple terms, "If it doesn't add value, it's waste."

When we review the time people spend in the factory, for example, we often find that more than 95 percent of an operator's time is not being utilized to add value to the product. Rather, it is adding cost to the product. When we measure the material being processed in the factory, we may also find that, during more than 95 percent of the time, that material is in storage, waiting to be transferred, processed, or inspected. Similarly, a machine may be producing unnecessary or defective products, or it may be broken down or require maintenance. In either case, it is obviously not being used to add value to the product. Exhibit 1.2 is a graphic representation of the problem.

People may say, "We know all of that." But the questions we should ask ourselves are, "Then what are we actually doing to reduce this waste?" "How much of our time is spent on eliminating this waste?" "Do we really know how much of this waste can be eliminated?" "Do we really know how much dollar savings can be achieved through such efforts?"

Unfortunately, most of us cannot answer these questions. One thing we should remember is that a lot of our work requires immediate action. The urgency of such matters can keep us from analyzing and planning our work. We may feel we have accomplished more when we spend time on urgent work and exhaust ourselves. But is it really a productive way of using our time? The following portion of this chapter is devoted to answering these questions.

Seven Wastes

What we are talking about here is the need to introduce production improvement practices where the action is taking place, that is, on the shop floor. By diligently practicing problem solving with as many people as possible, many of our current problems will disappear.

While each person's ideas will be used to facilitate the improvement of factory operations, the most powerful results can be obtained by implementing improvement activities in the most integrative fashion so that each island of improvement can be tied together with the others. Also, we want to develop certain approaches to facilitate these improvements so that the improvement process becomes effective. In order to achieve such goals, we need to understand more about waste in the factory.

While products made in each factory may be different, the typical wastes found in factories are very similar. After years of improvement activities, Toyota identified the following seven types of waste as the most prominent ones.

Waste from overproduction. Toyota concluded that overproduction is one of the worst wastes commonly found in factories. This waste is created by producing goods over and above the amount required by the market. When the market is in an upswing, this waste may not be prominent. However, when market demand slows, the effects of overproduction are compounded and companies often get into trouble carrying unsold goods as extra inventory.

Overproduction waste is typically created by getting ahead of the work. When this happens, more raw materials are consumed and wages are paid for unneeded work, thereby creating unnecessary inventory. This in turn requires additional handling of materials, additional space to hold inventories, and additional interest paid to the bank for money used to carry the inventories. It may also require additional people to monitor inventories, additional paperwork, extra computers, more forklifts or warehouse space, and so on.

Furthermore, excessive inventory leads to confusion about what needs to be done first. It also distracts people and prevents them from focusing on immediate objectives or tasks. As a result, additional production control people are required. Since operators seem busy and machines are occupied unnecessarily, additional equipment may be purchased on the mistaken assumption that it is needed.

Since overproduction creates difficulties that often obscure more fundamental problems, it is considered one of the worst wastes and should be eliminated. In order to do so, we first need to understand that machines and operators do not have to be fully utilized, as long as market demands are met. (This may seem odd to many people, but it makes sense.)

Operators at each stage of production should think of the next process as their "customer" simply because the next process involves working on the product produced in the previous process. We should make sure that only the amount required by the customer is produced, at high quality, low cost, and at the time needed.

Waste of waiting time. While waste from overproduction is not always easy to identify because the operators appear to be busy (even though their work does not add value to the product), waste of waiting time is usually easy to identify.

In fact, waste in the form of waiting should be exposed, so that corrective action can be taken. For example, instead of occupying machines to overproduce goods, operators should remain idle when the required amount of work is finished. With this practice in place, supervisors can thus better assess the capacity and control the situation more readily.

If we look around the factory, we also find operators simply watching machines run. Some may say that machines must be watched so that corrective action can be taken quickly whenever a problem arises. But is that not already too late for an operator to take action? Shouldn't there be a mechanism that automatically stops the machine and buzzes or lights up to alert an operator when an abnormal condition occurs?

Another way to look at this is that there will be no initiative to eliminate the causes of such problems because these problems are not being exposed clearly to the supervisor's eyes; instead they are often resolved by operators without a supervisor's knowledge. Even though some supervisors may prefer to ignore such problems as long as production schedules are met, should such practices be allowed?

Transportation waste. Transportation waste and double or triple handling are also commonly observed wastes in most factories. For example, incoming material may be stored in the warehouse before it is brought to the line. With such a practice, a tracking person has to be informed where to pick up the material, where to store it in the warehouse, where and when to pick it up again, and where to deliver the material down the line. He may even have to bring materials left over from the line back to the storage area if there is a lack of coordination.

Ill-planned layouts may make long-distance transportation necessary. They can also result in double or triple handling of parts that have been put away in a disorderly manner and then kept in temporary storage and switching storage locations. Often we are amazed to discover how many miles a product must travel through the factory before it is completed.

In order to eliminate this waste, improvement in layout, coordination of processes, methods of transportation, housekeeping, and workplace organization need to be considered.

Processing waste. The processing method itself may be a source of problems, resulting in unnecessary waste. For example, a certain die-casting operation may require additional labor to file and finish the surface. But a finishing operator may be quite unnecessary if the die is maintained well or if manufacturability had been considered in the product design.

Also, in manufacture of the products, certain aspects of the painting, sealing, or bolt-tightening processes may be unnecessary in meeting product requirements.

When fixtures are not well maintained or prepared, operators may have to use extra effort in processing the materials. Certain defects may be produced by these inappropriate processing procedures.

An example of improvement in a drilling operation to eliminate waste in processing is represented in Exhibit 1.6.

Certain fixtures may be added or modified to facilitate operation of a machine. For example, the use of an air cylinder or chain and sprocket may help to automate the machine drilling operation. Similarly, the power of the drill machine motor may be used to eject the finished product automatically. Also, the combination of a gravityfed chute and fixture may make automatic loading possible, thereby totally eliminating operator involvement.

Inventory waste. As discussed above in connection with waste of overproduction, excess inventory increases the cost of a product. It requires extra handling, extra space, extra interest charges, extra people, extra paperwork, and so on.

Because of the problems associated with unnecessary inventory, we should consciously try to reduce inventory levels.

* Dispose of obsolete materials (housekeeping/workplace organization).

* Do not produce items not required by the subsequent process (line balance).

* Do not purchase or bring in items in large lot sizes (savings achieved through volume discounts, may be more than offset by inventory waste).

* Manufacture products in small lots (reduced setup time/more changeovers).

As we begin to reduce inventory levels, we may find more problems that need to be addressed before the inventory level can be reduced further. This is comparable to reducing the water level to expose the rocks as shown in Exhibit 1.8.

Because of the many problems associated with inventory, we need to pay more attention to clearing out the waste associated with inventory. To emphasize this point, let's just say that excess inventory is the root of all evil.

Waste of motion. Whatever time is not spent in adding value to the product should be eliminated as much as possible. One fact we should constantly bear in mind is that "move" does not necessarily equal "work":

An operator may keep "busy" for three hours looking for tools all around the factory without adding even a penny of worth to the product. Instead, he has increased the cost of the product by three hours of his wages together with three hours of production lead time before delivery of the product to the customer.

arWe can find many other examples of this kind of waste. Pick and place is another example of movement that can be reduced by keeping parts or tools closer to where they are used -- or even eliminated by using chutes and other fixtures.

Walking is another kind of wasteful movement, especially when one person is responsible for operating several machines. Machines should be placed so that the operator's walking time is minimized.

Waste from product defects. When defects occur at one station, operators at subsequent stations waste time waiting, thereby adding cost to the product and adding to production lead time. Furthermore, rework may be required or the defective products are scrapped. If a defect has occurred in the assembly operation, additional labor is required to disassemble the product, and additional parts are required for reassembly. Obviously, schedules must be adjusted to accommodate these changes.

Sorting out bad parts from good parts also requires additional labor. There is a waste of both the materials and the value of work already added to the parts.

An even worse case exists when customers find defects after product delivery. Not only are warranty costs and additional delivery costs incurred, but future business with the customer as well as market share may be lost.

To eliminate these problems, a system must be developed to identify the defects or the conditions that produce defects so that anyone present can take immediate corrective action. Without such a system, other time-saving advances are futile. Highly industrialized countries are introducing more automated machines that are capable of producing products in a short time period. However, these machines will also produce defective products at a very fast rate unless a better preventive system is developed.

Simplify, Combine, and Eliminate

The difficulty in eliminating waste is that most of us have not directed our efforts to finding waste and eliminating it. But with more conscious effort, everybody should be able to practice this. After all, it is said that 90 percent of improvement comes from common sense. Most improvement seems so basic after the fact that people wonder why they did not think of it before. In order to acquire these skills, however, certain principles of improvement will help so that we do not have to reinvent the wheel.

Industrial engineering techniques can be basic to improving operations. But though some people may feel that improvement activity should be left to the industrial engineers because "they are paid to do it," this is not the case. We can all contribute to the improvement process. After all, who knows better about the work areas than the operators. The basic idea of improvement is simple. We want to do our work easier, faster, cheaper, better, and safer. To do so, a basic approach to improve our operations is to simplify, combine, and eliminate.

But, as with learning skills such as baseball, tennis, or swimming, this approach requires tenacity. It also requires an inquisitive mind.

So let us try out a few examples here. Looking at a number of actual examples is a way to acquire confidence in making improvements and to make developing improvements a habit.

Simplify

Case 1. In an assembly operation, an operator was using two different parts for making two different products. Because the two parts were similar, occasional mistakes resulted when the wrong part was used.

A simple solution was developed to reduce this confusion. Each parts storage box was painted a different color to correspond to the color designated on the work order card for each job. Learning from this experience later, the product design engineer came up with the idea of using two different colors for the parts as well.

Color coding is one of the simplest methods to eliminate unnecessary confusion in daily plant operations. Corresponding bolts, tools, and dies can be painted the same color to help with quick setup operations, or lines or departments can be defined by certain colors for easy transferring of parts and materials.

Case 2. In a machining operation, an operator occasionally made careless mistakes by placing the parts in the wrong direction. This resulted in a waste of materials and shortened machine tool lives. A solution to this problem was simply to add a fixture to the machine (see Exhibit 1.11). This type of idea is called poka-yoke (foolproof mechanism) in Japanese. It allows an operator to concentrate on his work without paying unnecessary attention to preventing mistakes.

Other applications of this idea include the use of a template to indicate the location of certain operations, or use of a counter or interlock to check the appropriate sequence of operations.

Combine

Case 3. A machining operation used two machines, each handled by a different operator. Since each machine was highly automated, the operators' time was not well utilized. They spent most of their time watching the machine operation -- adding no value to the product. By moving the machines closer together and combining the work, one operator could run both machines and still produce the same total output (see Exhibit 1.12).

Case 4. In a setup operation, a used die was removed before a new die was installed. This approach required four steps to complete setup. A new plan, however, combined removal of the old die and insertion of a new die into one operation by the use of a specially designed cart that runs on rails. This new method eliminated three steps from the operation and reduced setup time significantly (see Exhibit 1.13).

Case 5. To improve stamping capacity, a specially designed grabbing device (an "iron hand") was installed to take the stamped part out of the machine quickly, utilizing the upward moving force of the machine (see Exhibit 1.14). With this arrangement, the upward force, which in itself does not add value to the product, is now combined with the work of the iron hand. Since this device was designed to reach the part even before the upper die reached the highest point of its stroke, additional stamping capacity was gained.

Case 6. A similar idea was developed in the setup operation for an injection moulding machine. The new die is preheated using heat available from the machine. This method saves time because the die is heated before it is set on the machine and no adjustment is necessary. (Since the new die is heated, however, certain considerations are necessary for easy handling.) One solution is to reconfigure the machine structure and to prepare the new die underneath the old die, connecting them with a chain so that one movement of the crane action can do the work instead of a two-step movement (see Exhibit 1.15).

Eliminate

Case 7. In a setup operation, adjustment typically took a large portion of the operator's time. But simple solutions can often be found to eliminate adjustment work. In Exhibit 1.16, die height was standardized so that setup was much simpler, eliminating the adjustment process. The same idea may be applied in other areas such as eliminating horizontal adjustment by providing locator pins or standardizing bolt heads.

Case 8. During transfer of materials between sequential processes, unnecessary energy was wasted in double handling of the materials, trucking, and pick and place of materials on the conveyor. This waste was eliminated by synchronizing the neighboring processes and developing one-piece flow production, passing the work-piece from one operator to the next with less material handling.

In Exhibit 1.17, steps A to D illustrate the elimination of unnecessary handling and transportation. Not only do these improvements save time, but the inventory between the processes, inventory storage space, and production lead time have also been reduced significantly.

Case 9. In designing a product, there may be a lack of communication between engineering and manufacturing areas. As product variety increases, the complexity of the manufacturing operation needs to be well understood and incorporated into the design phase.

One solution may be the use of standard parts for different products. The proliferation of parts is reduced, thereby eliminating the setup operation.

Summary

This chapter has presented a general review of manufacturing operations from a broad perspective. We have discussed the different types of waste that are prominent in our factories and have reviewed some of the approaches for improvement. While understanding each specific technique is important, we also need to ask the following questions in the remaining portion of the book.

1. How does each of these improvements benefit the total manufacturing operation?

2. How do we integrate the islands of improvement into the total system to make the most sense?

3. How do we coordinate the implementation of these efforts?

Copyright © 1987 by Kiyoshi Suzaki