This document discusses the concepts of value, waste, and lean manufacturing. It defines value-added activities as those that directly change a product to meet customer needs, while non-value added activities are necessary but do not increase value. The main types of waste are identified as muda (non-value added work), mura (unevenness), and muri (overburdening work). Specific examples of muda include transportation, inventory, motion, waiting, overproduction, overprocessing, and defects. The document emphasizes that eliminating waste through lean principles can improve flow and reduce costs for companies.

1. Value and Waste
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2. Understanding Value
$ Cash !!
Value !!
Customer
Low Cost Your Company
High Quality Profit
Availability Repeat Business
Growth

3. Value-Added vs Non Value-Added
Value-Added
- Changes fit, form and function of product or service
- Transformation step has value to customer (customer would be
willing to pay for it)
- It is done right the first time
Non Value-Added
- Everything else
Necessary - Has to occur to produce product or service
Unnecessary - Does not have to occur to produce product or service

4. Resources
Organizational Resources:
- Man
- Machine & other infra-structure
- Materials
- Method & information
- Money
- Market & brand

5. Waste
How often have you used the
expressions:
“That was a waste of time!”
or
“That was a waste of money!”
or
“That was a waste of effort!”

6. Eliminating Waste
So what can we do to eliminate waste?
We first need to identify what is & is not waste, then we can
look at ways of eliminating or at least reducing waste.

7. Identifying Waste
Operational Activity
Value added Oper ations
- Any process that changes the nature, shape or characteristic of
the product in line with customer requirements
e.g. Pressing, welding, heat treatment.
This is where we make a profit!

8. Identifying Waste
Operational Activity
Non -Value added Oper ations
Work carried out which is necessary under current conditions, but
does not increase product value.
e.g. Inspection, tool change, maintenance.
This is where we make a loss!

9. Operation time
The objective is to raise the ratio of Value added operations to
Non-value added operations and eliminate waste.
OPERATOR TIME
VALUE
WASTE NON-VALUE ADDED
ADDED
MORE TIME FOR NON-VALUE VALUE
OTHER ACTIVITIES ADDED ADDED

10. Elimination of Waste
Waste is everywhere!
The elimination of waste is a massive opportunity!!
Lean Strategy is the best way to eliminate waste

11. Flow Manufacturing
We know that there is a direct
link between flow and cost
Elimination Improved
=
of Waste Flow
Improved Decreased
=
Flow Cost
Decreased New Business
Cost =
Sustainable Profits

12. Understanding Value and Waste
- To go Lean and stay Lean, you continually need to understand
customers and what they value.
- To satisfy customers, you will need to eliminate or at least reduce
the wasteful activities for which your customers would not wish to
pay.
- To do this, Lean leader Toyota identified three key areas to address:
muda, mura, and muri.
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13. Lean Manufacturing Wastes
- When people think of waste in manufacturing they usually only
think about all of the scrap material that gets thrown away or if
your lucky recycled, they often forget about all of the other actions
that waste our time, our resources and our MONEY..
- When someone who has had some contact with Lean Manufacturing
talks about waste they are often talking about Muda, or the seven
wastes (or 8+ wastes depending on your definitions), but they
often forget the other wastes defined within the Toyota Production
System; Mura and Muri.
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14. Muda (the 7 waste)
Muda is any activity or process that does not add value, a physical
waste of your time, resources and ultimately your money. These
wastes were categorized by Taiichi Ohno within the Toyota
production system, they are;
Transport; the movement of product between operations, and
locations.
Inventory; the work in progress (WIP) and stocks of finished goods
and raw materials that a company holds.
Motion; the physical movement of a person or machine whilst
conducting an operation.
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15. Muda (the 7 waste)
Waiting; the act of waiting for a machine to finish, for product to
arrive, or any other cause.
Overproduction; Over producing product beyond what the customer
has ordered.
Over-processing; conducting operations beyond those that customer
requires.
Defects; product rejects and rework within your processes.
Talent; failing to utilize the skills and knowledge of all of your
employees.
Resources; failing to turn off lights and un-used machines
By-Products; not making use of by-products of your process
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16. Transportation
- Material/parts movement
- Unnecessary moving or handling of parts.
- Handling equipment moving with no parts.
- Raw material batch sizes not matching production batch size.
- Material stored a long way from point of use.
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17. Waste of Transportation:
Example
Employee walks 35 feet to next station 32 times per day
Avg. walking pace = .227 seconds per foot
.227 seconds x 35 feet = 7.9 seconds per trip
7.9 seconds x 32 times = 252.8 seconds per day
252.8 seconds x 260 working days = 18.3 hours per year
18.3 hours x $20 per hour = $366 per year spent for employee to
walk to next station
If stations were 6 feet apart, the amount paid to walk to next
station would only be $63

18. Inventory
- Inventory makes control difficult and obscures the opportunity for
improvement.
- Delays action in dealing with faults and defects
- Reduces need to face up to fast tool changeovers
- Imbalance in facility capability
- Goods can become damaged or obsolete
- Creates unnecessary searching and movement of materials
- Takes up space
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19. Waste of Inventory:
Example
Company rents warehouse space to hold extra inventory
Need 4,000 square feet to hold inventory
Warehouse space costs $4.00 per square foot per month
4,000 square feet x $4.00 = $16,000 per month
$16,000 x 12 months = $192,000 per year for storage

20. Motion
- Looking for tools, materials etc
- Double handling
- Turning
- Bending
- Stretching
- Walking ……. etc
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21. Waiting
- Waiting for material
- Waiting for maintenance
- Waiting for tool change
- Waiting for quality checks
- Waiting for next station
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22. Waste of Waiting:
Example
Employee waits 20 seconds for previous operation to finish
each part
20 seconds x 60 parts per hour = 20 minutes per hour spent waiting
for parts
20 minutes x 8 hours per day = 2.67 hours per day spent waiting
2.67 hours x 260 days per year = 694.4 hours per year spent waiting
694.4 hours x $20 per hour = $13,888 spent on employee waiting for
previous operation

23. Overproduction
- Making more than the customer needs
- Making in large batches
- Overrunning an unstable process
- To produce more than is required
- To produce before required
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24. Over-processing
- Wrong choice of equipment
- Bad definition of customer's needs.
- Useless operations
- Excessive movement in process cycle
- Too frequent inspections
- Excessive set-up or downtime
- Bottlenecks
- Unbalanced process
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25. Defects
- Scrap
- Rework
- Trimming
- Rejects
- Recalls
- Defects are the primary metrics in Six Sigma strategies.
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26. Talent
- Non use of people
- Skills
- Communication
- Creativity
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27. Mura (Waste of Unevenness)
Mura is the waste of unevenness or inconsistency, but what does this
mean and how does it affect us? Mura creates many of the seven
wastes that we observe, Mura drives Muda! By failing to smooth
our demand we put unfair demands on our processes and people
and cause the creation of inventory and other wastes.
One obvious example is production processes where the manager
is measured on monthly output, the department rushes like mad in
the final week of the month to meet targets, using up components
and producing parts not actually required. The first week of the
month is then slow due to component shortages and no focus on
meeting targets.
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28. Muri (waste of Overburden)
Muri is to cause overburden, by this we mean to give unnecessary
stress to our employees and our processes.
This is caused by Mura and a host of other failures in our system such
as lack of training, unclear or no defined ways of working, the
wrong tools, and ill thought out measures of performance.
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29. Mura, Muri and Muda
Finally Mura causes Muda, the seven wastes are symptoms of our
failure to tackle Mura and Muri within our processes not the root
cause!
Lean Manufacturing is about the removal of waste; but not just Muda
(non-value adding steps), it is about removing Mura and Muri too.
In fact by concentrating on solving Mura and Muri you prevent the
creation of Muda.
By working on Just in Time (JIT) principles with Heijunka,
Kanban and other techniques you enable production smoothing
and flow; removing the causes of Mura, unevenness. The other
lean tools such as 5S help you to remove other causes of
overburden removing Muri, overburden.
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30. Typical symptoms of Waste
- Excessive Cycle, Lead or Flow Time
- Excessive costs
- Poor quality
- Inflexible production systems
- Late deliveries
- Excessive inventories
- Dependency on work-around methods
- Reactive fire-fighting
- Daily management by exception

31. Wastes Effect
Overproduction discourages a smooth flow of production and leads to
Over production
excessive work in process inventory. This increases overall delivery times .
Inventory Adds cost, requires space, hides process defects, can encourage
damage.
Adds time & cost and can be a safety issue.
Motion
Creates excessive lead time, causes bottlenecks, causes additional time &
Waiting cost.
Leads to increased time & cost to transport & search, and increased Defects
Transportation due to accidents.
Can result in scheduled work time being longer than needed, Parkinson’s
Over processing
Law in project task execution, increases in time & cost.
Defects Defects can lead to additional time and cost, and more critically it can reduce
customer confidence.
Overproduction is considered the "mother of all wastes" since it can lead to increases in all the
other forms of waste.

32. Lean Enterprise Principles
CONTROL MEASURE
1. Specify value in the eyes of the customer.
2. Identify the value stream and eliminate waste.
3. Make value flow at the pull of the customer.
4. Involve and Empower employees.
5. Continuously improve in pur suit of per fection.
IMPROVE ANALYZE

33. Practical work sample
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34. Questions
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