Waste is the root cause of a large percentage of manufacturing cost. For this reason, waste is the target of most manufacturing improvement efforts. In fact, improvement strategies, such as Lean Manufacturing, focus efforts on eliminating waste rather than speeding up a value-adding process.
In order to actually eliminate waste, you have to be able to identify it. There are a number of different types of waste in a manufacturing operation. I will be discussing some of these in both this month's and next month's columns.
Inventory Waste—One of the costliest wastes is excessive inventory. Inventory waste inevitably occurs because manufacturers don't know how much of a given product to produce. Therefore, they tend to overproduce to assure that they don't run out. Unfortunately, this overproduced inventory is waste because it represents time and money we have invested in material and labor expenses that cannot be readily converted into cash. Why else do we produce too much inventory? Well for one, our machine setups can be so time consuming that we would rather make more than we need than endure another costly setup. Another reason is part complexity. Sometimes parts are so difficult to make that when we have the production process "just right," we want to keep running so we don't have to experience this production headache in the near future. Yet another reason for excessive inventory is unreliable suppliers. If our suppliers have extended lead times, we want to get as much as we can during our window of delivery opportunity. In this case, we are actually rewarding our suppliers for poor delivery performance by buying increased quantities. Inventory levels in excess of those you need to make what you can ship are a waste and come with the high cost of inventory carrying charges (that may equate to 25 to 35 percent of the value of the inventory per year).
Remedies to inventory waste are changing manufacturing processes to support the production of components to order, focusing efforts on reducing setup times, redesigning products to minimize component complexity and establishing "win-win" partnerships with key suppliers.
Processing Waste—Processing a part to do more than is required to make it function properly is wasteful. Often processing waste is caused by product changes without process updates. The design changes just don't get properly communicated to the manufacturing operations (has anyone seen specs calling for continued plating of a newly introduced material, such as stainless steel?). One of the most common kinds of processing waste is packaging for in-plant handling and transportation. We realize there is a need to protect parts from damage, and we will go to great expense to do this instead of eliminating the handling and transportation. Finally, holding parts to tolerances that are not really required is an example of waste that almost every manufacturer has had to contend with. I have even heard engineers say that they build in a tighter tolerance on a part than is required just so the machinist will hold a lesser tolerance than is the true requirement. This bizarre thinking is the ultimate in wastefulness, as the cost incurred in making the effort to achieve the unnecessary (and often unachievable) is significant.
Processing waste can be remedied by implementing design change reviews that assure all process changes are made in parallel with design changes, establishing manufacturing processes to reduce handling and implementing good communication practices between engineers and manufacturing personnel.
Motion Waste—If all the things that people needed to do their jobs were strategically located in a convenient area, much motion would be eliminated. Any time someone has to walk to another area, bend over to pick up parts or reach a great distance to get an item, this is wasted motion. These motions are also frequent causes of worker injuries, which may result in the ultimate waste: lost time. Wasted motion may be the easiest type of waste to eliminate. By simply watching a person do a job, you can see if wasted motion has been built into the job. You can also observe how often someone has to search for something, the No. 1 cause of wasted motion.
The best remedy for wasted motion is a well-organized workplace in which an operator has all required items within an arm's reach to find anything quickly.
Next month, I will discuss the wastes of waiting, transporting and defects.