There are differing opinions on how many ‘types’ of waste an organisation might have. Current thinking suggests, seven, eight, or even nine depending on the nature of the organisation and the type of work carried out.
Originally, there were said to be seven types of waste, and these were largely found in manufacturing organisations. They can be listed as:
- Excess inventory
- Waiting (lost time)
- Unnecessary motion
- Unnecessary transportation (double handling, or moving excess stock)
- Re-work (poor quality)
- Over-processing (over-engineered)
In each instance, it is recognized that even incremental improvements can help an organisation to increase its efficiency and reduce its costs. These savings and improvements are typically realized in a greater proportion of better quality output, meaning that even small improvements can have an exponentially large positive outcome.
It is also noted that each one of these seven types of waste can be tied to different types of organisational or interrelated processes. For example:
- Better inventory management and supply chain management can reduce the need for overproduction and the need to hold inventory, and it is also linked to the principal just-in-time in that there is no need to transport an excessive inventory unnecessarily, nor is there a need to wait unnecessarily for raw materials or component parts.
- From a manufacturing or engineering perspective, unnecessary processing or reworking not only saves time in planning and preparation but also saves cost and resources.
- From an operational layout perspective, a more efficient production line reduces unnecessarily handling unnecessary motion and potentially unnecessary rework.
- Collectively, even small improvements at each and every stage of the process results in outcome known as the accumulation of incremental gains.
More recently there has been discussion of further types of waste, although these are more commonly associated with intangible types of waste suited to service environments. They include the underutilisation of human capital such as a failure for an organisation to be as creative or innovative as possible, and also the waste of underutilised solutions or lost opportunities. This occurs when organisations do not take full advantage of opportunities presented to them because they are constrained by their own measures of success. In other words, an organisation performs well relative to its own targets but because it is introspective it has failed to recognise that its competitors have taken much greater advantage of market opportunities and have much higher standards. In other words, an organisation must be careful it is not measuring the wrong things, and therefore creating waste in the process.
In a world of increasing technological sophistication, it is probable that these latter two wastes, the loss of human intellect and capital, and a lot of opportunities will become much more significant.
Perhaps surprisingly, very large amounts of waste can be hidden or disguised in organisational processes. Often more so than many organisations may realize because they have failed to update their operational processes for many years. The following figure provides an illustration of some of the types of waste and how they can occur in a ‘sea of inventory’. Therefore, in order to begin to tackle some of the types of waste, identifying these issues and adopting a continuous improvement mind-set can help to reduce and hopefully ultimately eliminate these problems.
There are a number of practical steps to eliminating waste in basic operations. All of these can be associated with the overarching principles of lean, and the aim of reducing and eliminating waste in operational procedures. These basic working practices are as follows and, the central feature which links all of them is the involvement of everybody within the organisation at every level.
- Discipline – well-defined work standards which are adhered to are fundamental to organisational outcomes. Not only does this assist with maintaining quality throughout operational manufacture or process, but it could also have health and safety implications. Everyone must follow these disciplined procedures all the time in order to have the cumulative desired output. A failure to do so, is likely to increase the risk of defects and cost other types of waste in re-work later on.
- Flexibility – organisational procedures whilst well-defined, need to accommodate a measure of flexibility. This principle is associated with the natural parameters of a task, meaning that if it is more sensible for different part of the organisation for a different individual undertake the role, then this should be permitted. Ultimately this leads to greater autonomy, and often in practice translates to individuals on the shop floor who are typically very efficient with their jobs, being allowed to adapt (but document or record) more efficient ways of undertaking tasks.
- Equality – it is important for organisations to recognize the contribution of every employee no matter what their job role of function in the organisation. Everyone has a job to do, and without full cooperation and collaboration for all employees, then it is unlikely that the organisation will perform well in the long term. Some organisations choose to achieve this by introducing uniform policies irrespective of whether an individual works in a management role or otherwise, or some choose to have open plan offices.
- Autonomy – there is widespread agreement in other areas of research such as human resources management, that affording employees autonomy in their daily lives dramatically increases their commitment to the organisation and improves their motivation and engagement, as well as their productivity and efficiency. Line managers should have the confidence to delegate as much as possible involving employees in problem-solving on their own account. This however must be tied to principles of flexibility and equality in the sense that organisations must also be willing to accept that are occasions when employees will make mistakes. If organisations then immediately punish autonomous decision-making which doesn’t deliver perfect results, then it will immediately inhibit any form of organisational employee engagement. Again it illustrates the point of organisational mind-set.
- Employee development – in the long term, an organisation should continue to invest in its employees so that they introduce more efficiency and more creative and innovative suggestions leading to increased efficiency and competitiveness. A highly skilled and highly trained workforce helps to raise the standard within an organisation.
- Working quality – also referred to as quality of working life. There is a responsibility on the part of the organisation to create secure working conditions so that employees can focus on doing their job to the best of their ability rather than worrying about aspects such as job security and in the process becoming distracted from their daily tasks. This is particularly pertinent in an era of zero hours contracts as it is shown that there is a direct link between job insecurity and reduced organisational productivity.
- Creativity – ideally, an organisation should strive to offer employees the opportunity to work creatively, as this that only increases motivation and work commitment, but also helps to put forward suggestions for improving efficiency and new ways of working which are leaner
- Total involvement – if employees are involved in every aspect of the organisation as far as their role and skills permit, they are more likely to be committed to the organisation, and put forward suggestions for organisational improvement. Total involvement also improves internal organisational communication (lack of communication being a major source of waste). This also helps to increase their creativity and suggestions for improvement.
Overall it can be seen that these working policies are what might be described as best practice and that they are more effective when used in conjunction with one another, valuing the contribution of employees at all levels. Without these fundamental practices in place, it is unlikely that an organisation will see significant productivity improvements. However, it is also obvious that it will take some time for an organisation to implement these policies on the basis that they can be contradictions between organisational discipline and employee creativity. Thus, thinking that these working practices as a long-term aim or goal is perhaps more realistic.