There are 3 types of activities, 2 of which produce waste:
- Steps that definitely create value.
- Steps that create no value, but are necessary given the current state of the system.
- Steps that create no value and can be eliminated.
(2) & (3) naturally create wastes, of which there are 7 types:
- Over-Production: Producing more than is needed, faster than needed or before needed.
- Wait-time: Idle time that occurs when co-dependent events are not synchronized.
- Transportation: Any material movement that does not directly support immediate production.
- Processing: Redundant effort (production or communication) which adds no value to a product or service.
- Inventory: Any supply in excess of process or demand requirements.
- Motion: Any movement of people which does not contribute added value to the product or service.
- Defect: Repair or rework of a product or service to fulfill customer requirements.
But, Taichi Ohno considered an 8th type of waste that I want to touch on now:
- Unused Employee Creativity: Losing time, ideas, skills, improvements, and learning opportunities by not engaging or listening to your employees (via Liker).
The 8th Waste
It is unfortunate to see and experience low morale — unmotivated employees who don’t believe in the service or product. Feelings like that manifests itself at work and, at the end, the customer is the casualty.
Deming famously observed that 85% of all operational and business problems are the fault of management. Managers alone have the power to establish systems, and systems largely determine the quality of outputs and the customer experience. I agree with Deming, for the most part, but this post is not aiming to put blame on anybody, but is rather a lament on the 8th type of waste.
Part of Customer Obsession includes pleasing the employee — allowing him or her to shine and allowing him or her to use their skills and talents at work. If not, morale will decline and employees languish at work. Again, when this happens the customer becomes the ultimate casualty.