Waste vs. Value Added

Principles:

• The major problem within industries Today is Waste.
• One way of identifying waste is to check whether your operation (or activity) add any value to the product or service.
• Waste is defined by Mr. Fujio Cho (Toyota Company, Japan) 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."

Categories of Waste:

In most organizations, the following items are claimed as the major sources of Waste:
• Overproduction.
• Waiting for materials, machines, or instruction.
• Transportation or movement.
• Machine processing.
• Excessive inventory.
• Inefficient operations.
• Producing defects.
• Model or line changeover or setup machines.
• No housekeeping.
• Miscommunication or misinstruction.

Discussion Questions:

1. Among the above categories of waste, which is (are) the most critical one (ones) in your organization (your daily operations)?
2. Please identify at least five examples of waste from your daily operations? Why do you think they are kind of wastes? How can you eliminate or reduce these wastes?
3. Why overproduction is a kind of waste? What is its impact on organization's competitive advantage? How can you avoid or reduce it?
4. Why inventory is a kind of waste? What is its impact on organization's competitive advantage? How can you reduce inventory level?
5. Why producing defect is a kind of waste? What is its impact on organization's competitive advantage? How can you reduce defects?

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