SUPPLY NETWORK PLANNING

7 WASTES LEAN & 5S LEAN

STUDENT: VLADIMIR COLI COTO

MR. ROGERIO CEBALLOS MURO

GROUP: 9°C NOVEMBER

3RD, 2021
 7 WASTES LEAN

Eliminating wasteful activities is one of the most important prerequisites for building a
successful company. This concept is an integral part of Lean thinking, and it helps you
increase profitability.

The idea of eliminating waste originates from the Toyota Production System. Taiichi Ohno,
who is considered one of the founding fathers of lean manufacturing, dedicated his career
to establishing a solid and efficient work process.

During his journey, Ohno described three major roadblocks that can influence a company’s
work processes negatively: Muda (wasteful activities), Muri (overburden), and Mura
(unevenness).

Based on his observations and deep

analysis, he categorized the 7 types of
waste (7 Muda’s), which later became
a popular practice for cost reduction
and optimizing resources.

 MUDA (LEAN
WASTE)

Waste in Lean is any activity that

consumes resources but brings no
value to the end customer.

In reality, the activities that indeed create value for the customers are only a small portion
of the whole work process. This is why businesses should focus on reducing wasteful
activities as much as possible. By doing so, companies can identify significant
opportunities to improve their overall performance.

Don’t make a mistake. Not all wasteful activities can be eliminated from your work
process. Some of them are a necessity.
For example, testing software is not an activity that your customers are willing to pay for.
However, without it, you may deliver a low-quality product that will harm your economic
performance. Therefore, there are two major types of waste:

NECESSARY WASTE – non-value-adding, but necessary to get things done in a quality

manner. Such activities can be testing, planning, reporting, etc.

PURE WASTE – non-value-adding and unnecessary. Anything that doesn’t bring value
and can be removed from the process immediately. Any form of waiting (known as
"waiting waste") can be described as pure waste.

After we clarified what waste is in Lean, let’s explore the seven wastes in detail.

 THE 7 WASTES OF LEAN

Optimizing processes to eliminate waste is crucial for the success of your company. Having
wasteful activities can lower profitability, increase customer costs, decrease quality, and
even employee satisfaction. For this reason, you need to identify the non-value adding
activities and try to improve the process where they appear or ultimately eliminate them.

Efficiency is about achieving peak performance, where we use the least number of inputs to
achieve the highest output. To minimize inputs, all waste must be eliminated.

In terms of production efficiency, there are seven types of waste:

1. TRANSPORTATION

This type of waste is when you move resources (materials), and the movement doesn’t add
value to the product. Excessive movement of materials can be costly to your business and
cause damage to quality. Often,
transportation may force you to pay
additionally for time, space, and
machinery.

2. INVENTORY

Excessive inventory is often the

result of a company holding “just in
case” inventories. In such cases, companies overstock themselves in order to meet
unexpected demand, protect from production delays, low quality, or other problems.
However, these excessive inventories often don’t meet customer’s needs and don’t add
value. They only increase storage and depreciation costs

3. MOTION

This kind of waste includes movements of employees (or machinery), which are
complicated and unnecessary. They can cause injuries, extended production time, and
more. In other words, do whatever is necessary to arrange a process where workers need to
do as little as possible to finish their job.

4. WAITING

This is probably the easiest waste you can recognize. Whenever goods or tasks are not
moving, the "waiting waste" occurs. It is easily identifiable because lost time is the most
obvious thing you can detect. For example, goods waiting to be delivered, equipment
waiting to be fixed, or a document waiting for executives' approval.

5. OVERPRODUCTION

Keeping in mind that waste is anything that the customer is unwilling to pay for, it is easy
to realize why overproduction is Muda. Producing more means that you exceed customer’s
demand, which leads to additional costs. Actually, overproduction triggers the other 6
wastes to appear. The reason is that excess products or tasks require additional
transportation, excessive motion, greater waiting time, and so on. Furthermore, if
occasionally a defect appears during overproduction, it means your team will need to
rework more units.

6. OVER-PROCESSING

This type of waste usually reflects on doing work that doesn’t bring additional value, or it
brings more value than required. Such things can be adding extra features to a given
product that nobody will use, but they increase your business costs. For example, if a car
manufacturer decides to put a TV screen in the back trunk of a vehicle, probably nobody
will use it or find value in it. Even more, it will cost resources, and it will increase the end
price of the product for something that customers are not willing to pay for.

7. DEFECTS

Defects can cause rework, or even worse, they can lead to scrap. Usually, defective work
should go back to production again, which costs valuable time. Moreover, in some cases, an
extra reworking area is required, which comes with additional exploitation of labor and
tools.

As you can see, the 7 types of waste are toxic to your business. However, you can see them
more as an opportunity to improve work processes and, most importantly, optimize
resources. For different businesses, the 7 forms of waste may have different aspects.

 IMPORTANCE

A process can be said to add value when, when producing a good or providing a service,
the customer pays for this process. If in a process more resources are consumed than
necessary, then we are having waste and for this waste, the customer does not pay us
because he does not want them. In Lean management it is important to know which are the
processes that do not provide value in order to eliminate them and establish improvement
actions in the processes that are providing value and that are, as mentioned, for which the
customer really pays us.

 ADVANTAGES
o Adequate production batch sizes, satisfying demand.
o Reduce excessive operation times.
o Reduce activities that do not add value to the product.
o Equipment capacity utilization.
o Good production flow.
o Good stock levels.
o Decrease of the defective fraction.
 DISADVANTAGES
o Implementation costs can be high because there may be modifications in the plant
design or in the purchase or automation of machinery, depending on the case.
o High costs may also be incurred in training employees to learn about the tool, its
operation and application from each workstation.

o Not all waste can be eliminated, depending on the complexity of the operation or
activity.
 USES
One of the main lessons learned is that the real work is not only what you do, but how
much value you add to the customer (whether internal or external). From this idea comes
the concept of "Muda", Japanese for "waste". This means that all the actions we perform
are justified if they add value for someone (including ourselves), if they are not a waste of
time, resources, energy, etc.

This classification, mainly oriented to production environments, has been redefined on

countless occasions for use in other sectors, without a great consensus.

However, it is worth mentioning the one made by Hitoshi Yamada, one of Taiichi's
apprentices, and responsible for further developing his legacy, who extrapolated the model
for direct application in almost any business environment.

 EXAMPLES
 DEFECTS
o Administering incorrect medication or doses to patients.
o Manufactured parts that don't pass inspection.
 Transportation
o Sending overstocked inventory back to a warehouse or an outlet store location.
o Transportation of products from one functional area to another.
 5S LEAN

5S is a system to reduce waste and optimize productivity through maintaining an orderly

workplace and using visual cues to achieve more consistent operational results.
Implementation of this method "cleans up" and organizes the workplace basically in its
existing configuration, and it is typically the first lean method which organizations
implement.

The 5S pillars, Sort (Seiri), Set in Order (Seiton), Shine (Seiso), Standardize (Seiketsu),
and Sustain (Shitsuke), provide a methodology for organizing, cleaning, developing, and
sustaining a productive work environment. In the daily work of a company, routines that
maintain organization and orderliness are essential to a smooth and efficient flow of
activities. This lean method encourages workers to improve their working conditions and
helps them to learn to reduce waste, unplanned downtime, and in-process inventory.

A typical 5S implementation would result in significant reductions in the square footage of

space needed for existing operations. It also would result in the organization of tools and
materials into labeled and color-coded storage locations, as well as "kits" that contain just
what is needed to perform a task. 5S provides the foundation on which other lean methods,
such as TPM, cellular manufacturing, just-in-time production, and Six Sigma can be
introduced.

Method and Implementation Approach

5S is a cyclical methodology: sort, set in

order, shine, standardize, sustain the cycle.
This results in continuous improvement.

 THE 5S PILLARS
1. SORT

The first S, focuses on eliminating

unnecessary items from the workplace that
are not needed for current production
operations. An effective visual method to identify these unneeded items is called "red
tagging", which involves evaluating the necessity of each item in a work area and dealing
with it appropriately. A red tag is placed on all items that are not important for operations
or that are not in the proper location or quantity.

Once the red tag items are identified, these items are then moved to a central holding area
for subsequent disposal, recycling, or reassignment. Organizations often find that sorting
enables them to reclaim valuable floor space and eliminate such things as broken tools,
scrap, and excess raw material.

2. SHINE

Once the clutter that has been clogging the work areas is eliminated and remaining items
are organized, the next step is to thoroughly clean the work area. Daily follow-up cleaning
is necessary to sustain this improvement. Working in a clean environment enables workers
to notice malfunctions in equipment such as leaks, vibrations, breakages, and
misalignments. These changes, if left unattended, could lead to equipment failure and loss
of production. Organizations often establish Shine targets, assignments, methods, and tools
before beginning the shine pillar.

3. SET IN ORDER

Set In Order focuses on creating efficient and effective storage methods to arrange items so
that they are easy to use and to label them so that they are easy to find and put away. Set in
Order can only be implemented once the first pillar, Sort, has cleared the work area of
unneeded items. Strategies for effective Set In Order include painting floors, affixing labels
and placards to designate proper storage locations and methods, outlining work areas and
locations, and installing modular shelving and cabinets.

4. STANDARDIZE

Once the first three 5S's have been implemented, the next pillar is to standardize the best
practices in the work area. Standardize, the method to maintain the first three pillars,
creates a consistent approach with which tasks and procedures are done. The three steps in
this process are assigning 5S (Sort, Set in Order, Shine) job responsibilities, integrating 5S
duties into regular work duties, and checking on the maintenance of 5S. Some of the tools
used in standardizing the 5S procedures are: job cycle charts, visual cues (e.g., signs,
placards, display scoreboards), scheduling of "five-minute" 5S periods, and check lists. The
second part of Standardize is prevention - preventing accumulation of unneeded items,
preventing procedures from breaking down, and preventing equipment and materials from
getting dirty.

5. SUSTAIN

Sustain, making a habit of properly maintaining correct procedures, is often the most
difficult S to implement and achieve. Changing entrenched behaviors can be difficult, and
the tendency is often to return to the status quo and the comfort zone of the "old way" of
doing things. Sustain focuses on defining a new status quo and standard of work place
organization. Without the Sustain pillar the achievements of the other pillars will not last
long. Tools for sustaining 5S include signs and posters, newsletters, pocket manuals, team
and management check-ins, performance reviews, and department tours. Organizations
typically seek to reinforce 5S messages in multiple formats until it becomes "the way things
are done."

Proper discipline keeps the 5S circle in motion.

 IMPORTANCE

These concepts are directly applicable to our plant, warehouse and, in short, to our logistics
system. It may seem trivial to talk about organizing, tidying and cleaning in our companies;
in fact, it is often given little importance, thinking that it falls more within the domestic
sphere. When these activities are undervalued, we are missing an excellent opportunity for
improvement; improvement, in short, in productivity. Inefficiencies can always be
eliminated; displacements and waste of time and space can always be avoided.

 ADVANTAGES

The advantages of the 5S methodology are reflected in both employee performance and
workspaces.

o Organization
o Systematization
 o Categorization
o Time management improvements
o Productivity improvements
o Optimization of tasks
o Improvements in material management, avoiding losses.

These advantages have a favorable impact on the work dynamics, generating better results,
professional growth and positive evolution in employee relations.

 DISADVANTAGES

The major problems with5S appear when it is not properly understood, used or
implemented.

o Misunderstanding of what 5S accomplishes

o Resistance to change
o Not addressing problems in the workplace
o Lack of management support
o It’s a culture not a method

 USES

The 5S methodology is based on five principles designed to facilitate work dynamics,

improving aspects such as the use of work spaces, organization, hygiene, rules and the
dynamics of coexistence within companies.

The 5S methodology is designed to develop, through the values described, aspects such as
innovation, efficiency in different areas, as well as improvements in productivity and the
final result of the product with which each organization works, whether material or
conceptual. Its proper implementation also results in a better way to manage crises when
they occur.

 5S EXAMPLE
During meetings with internal and external stakeholders, Kaiser Permanente Colorado’s
Medicaid Enrollment Project Team used the lean 5S tool to improve the enrollment
template, as well as the template process. They implemented the 5S pillars as follows:

 The fields were sorted and unnecessary fields were eliminated.

 The fields were set into order based on stakeholder input.
 The team shined by creating a Microsoft Access database that would not allow
duplicate entries.
 The spreadsheet was standardized by protecting it and making it a template.
 A self-sustaining system was created by using Microsoft Access (to control data
format and duplication) and Microsoft Excel templates (to control spreadsheet
format and order).