Practicing lean management through overcoming 7 Wastages.pptx

How to identify waste in an organisation

1. Practicing Lean Management through Overcoming 7 Wastages Ronnie Fernandes – LSSBB, ISO Lead Auditor

2. The 2 Factors that affects Business INTERNAL FACTORS EXTERNAL FACTORS EXTERNAL FACTORS

3. Selling Price Cost Profit

4. “…only the last turn tightens the bolt. All previous turns is just motion.” - Shigeo Shingo, the co-developer of the Toyota Production System in A study of the Toyota Production System,

5. Introduction Muda ( 無駄 ) is a traditional Japanese term which means “ Waste ”. One way to increase profitability of the firm is to fundamentally reduce costs. From a Lean perspective, this means to reduce or eliminate wastes. Reducing wastes means to be more profitable. To properly understand waste, it is important to first Clarify Value and Purpose of the Process . Every process has a purpose. All steps that lead to achieving that purpose are what we consider “ value ”. All the steps that do not support the purpose of the process is waste.

6. Lean Another way to describe waste is by categorizing our activities. There are 3 types of activities, 2 of which produce waste: A. Steps that definitely create value. (VA) B. Steps that create no value, but are necessary given the current state of the system. (BR), (CR) C. Steps that create no value and can be eliminated. (NVA) B & C naturally create waste, of which there are 7 types.

7. Exercise 1: Process Steps Steps Activities VA BR CR NVA 1  × × × 2 ×  × × 3 …..

8. What are the 7 Deadly Wastages? - Manufacturing (TIMWOOD) Overproduction : Producing more than is needed, faster than needed or before needed. 2. Waiting : Idle time that occurs when co-dependent events are not synchronized. 3. Transportation : Any material movement that does not directly support immediate production. 4. Over processing : Redundant effort (production or communication) which adds no value to a product or service. 5. Inventory : Any supply in excess of process or demand requirements. 6. Motion : Any movement of people which does not contribute added value to the product or service. 7. Defect : Repair or rework of a product or service to fulfill customer requirements.

9. What are the 7 Deadly Wastages? - Services Delays - delays in providing the customers with information, a product, or a service such delays can take many different forms (e.g. waiting in queues, waiting on hold on a phone, etc.) Duplication - filling in multiple forms with repeated data, this waste can be highly interruptive to the efficiency. Unnecessary Movement - Customers lose interest along the way if Communication is too segmented. (e.g. having to contact different internal departments in order to access a service) Unclear Communication - Creating a confusing customer experience through unclear instructions and industry jargon will frustrate your customers ……Continued

10. What are the 7 Deadly Wastages? - Services 5. Incorrect Inventory - Offering expired or out-of-stock products does not only frustrate your customers but will also come across as disorganized and highly unprofessional 6. Errors - Receiving the wrong item or possibly nothing at all is a waste of both yours and your customers' resources 7. Opportunity Lost - not recognizing opportunities to 'go the extra mile’, treating customers in a rude or annoyed manner will ruin your reputation and result in the loss of many opportunities

11. Case Study – Manufacturing Paint manufacturing Pvt Ltd Company from Panvel specializing in Coil Coating Segment 2. 3 Key Issues were Identified. a. Average delay in delivery by 5 Days, b. Rework in Shade matching - 6 times, c. Leakages in Machinery 3. We have deployed the above 2 tools and couple of other Lean tools. Within 3 months we achieved the following results. 4. Sales moved from 90-100 KL to 180 KL, Average Delay in Delivery came down from 5 to 2 Days, Rework in Shade matching 3 – times, Moved from Breakdown maintenance to Routine maintenance. 5. No additional cost was incurred to achieve the above changed.

12. Case Study – Services An Account Writing and Other Services Firm from Badlapur , Business owner is an accountant, with more than 400 SME clients. 2. 3 Key Issues were Identified. a. Rework in account writing b. Incorrect Compliance filings on behalf of customers, c. People Dependent processes. 3. We have deployed Various Lean tools. Within 6 months we achieved the following results. 4. Overtime dropped from (10 x 3 x 26) 780 Manhours to 0, Accuracy in Compliance filing moved from 45% to 95%, Transition from People Dependent processes to a System based Management system has been initiated. 5. No additional cost was incurred to achieve the above changed.

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