Spending money needlessly is waste, and if you waste enough money that will bring on a need for money. Lean Six Sigma tackles waste in any industry. Waste wears many masks — Let’s take a look at the different types. Remember, waste in business is like throwing money away, and that cuts into your profits.
Types of Waste
Defects: When products have defects, that means they are not up to standard or they don’t meet certain specifications and must be thrown out. Anytime a product isn’t sold and must be discarded, that is waste.
Overproduction: In an effort to have products ready for their customers, many companies will produce more than they need. This just creates excess inventory that takes up space and could be a potential danger if someone trips over it. This also doesn’t add value to your inventory; it just adds clutter.
Waiting: Waiting time in between day-to-day processes. This is useless and a definite waste of time. Either use DMAIC to improve processes or figure out why that time is idle.
Transportation: This has to do with moving either product or information about the product from one place to another. If your factory where you produce your product is in a different location than where you store your product, this is a waste. If the second location is far away, see if you can incorporate them in the same building or a closer location if not in the same building.
Inventory: This is what happens when a product is waiting to be sold. This can be caused by over-ordering or producing more products than the customer needs.
Motion: This happens if a team member has to move unnecessarily from one place to another during the process time. This could be a poorly designed workstation or poor processing patterns.
Extra Processing: This is anything extra that is not required by the customer, whether it is extra wrapping or containers, anything that is not necessary or required by the customer.
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