Lean Waste in 2023: How to identify waste from your processes?



One of the questions I get most is how do you identify waste?

And the answer in most cases is, it depends. As we will see below, waste identification is a combination of knowledge, experience, willingness, and resourcefulness.

The exploratory phase

To identify waste, first, we need to define what waste is.  As we know, we can group waste into two groups: 

  • Organizational
  • Behavioral

The main focus of a waste identification exercise is around the organizational waste. Still, we need to bear in mind behavioral waste can significantly affect our ability to identify and remove said waste.

Now, we need to define our exercise’s goal. What is it that we want to get out of a process?

It could be reducing cycle time, increasing our response ratio to customers, or implementing a process from scratch.

We are not constrained by anything, and as I have mentioned in other articles, any methodology can be applied to any industry.

The exploratory phase starts after the objective is defined. 

It’s the moment when we challenge the beliefs and assumptions of the organization and take everything back to the first principles.

What is it that we know? What is it that we don’t know?

Process and people performance, tools available, software, process efficiency, etc… all must be explored and treated equally to maximize the benefit of the identification exercise.

What is variation? Measure phase

Everything subject to measurement fluctuates over time. KPIs, production metrics, revenue, profit… even our employees are subject to variation.

Even how we measure our measures is subject to variation. This is especially important for product-led companies.

Variation can be defined as the measure of the changes in the product or service over a time frame.

variation graph

The measure phase aims to paint the picture of what the biggest sources of variation are for your process.

Before variation can be quantified, we need to ensure the exploratory phase has broken down the process’s steps.

I was referring to this when I said there had to be a combination of experience and knowledge.

Getting employees involved in this phase is important. The experience and knowledge come from them, especially around those pain points they live with.

The Analyse phase

Businesses are always looking for more effective ways to deliver value to customers and improve their revenue.

One of the low-hanging fruits of this exercise is to fix your employees’ pain points. Are they moving too much? Do they need to attend a lot of meetings? Are they always doing overtime?

Nothing like showing some love to your employees to boost morale and improve efficiencies, two birds with one stone.

To get into the more complex stuff, we will have to dig into the data we have been measuring.

Normally, the biggest wins are a combination of system failures. For this reason, it’s important to define a few concepts that are going to be useful going forwards.

  • Value added (VA)
  • Non Value added (NVA)
  • Non Value but necessary (NVA

Businesses that strive to reduce their NVA activities while increasing their VA activities are the most successful ones.

Value added

Value added is an activity that transforms or shapes materials or information to meet customer requirements.

It does not only refer to the last step, and it’s all the small steps/processes to meet your customer requirements.

Let’s give an example:

Imagine you want to send a postal card to a friend back in your home country, first you need to write it, then you need to pass it to a distributor, and finally, a delivery company will get the post to your friend.

Each of those 3 steps adds value to your requirement as a customer:

  1. You put some information on the postal card, so your friend knows it’s from you.
  2. You pass it on to somebody that can get the letter to your home country.
  3. A local delivery company will get the card to your friend.

Simple right? Let’s move on to NVA

Non Value Added

Subsequently, Non-value-added tasks are activities that take time, space, or resources but do not add anything to the process from a customer’s perspective.

Going back to our postal card example, let’s imagine for a second that once the card gets to the distributor they decide to put it into an envelope (most postal cards don’t need an envelope).

But how does that improve our friend’s experience? Does it give anything other than a piece of paper to remove?

Situations like this are more common than not, especially when processes are embedded in the culture and employees don’t question why they are doing what they are doing.

Non Value Added but necessary

Non Value added but necessary is all the other stuff that is happening behind the scenes that are required to fulfill your customer requirements, but they don’t perceive.

This is the kind of stuff that is critical to review repeatedly to ensure it’s still relevant to the process.

For example, all the bureaucracy, the accounting, or the internal handling of our postal card is not something that our friends will see.

But it is critical for the company to ensure our friend receives the card and not somebody else.

Before you go…

Identifying waste is only the first step of the whole process. In most cases, a team dedicated to analyzing and evaluating data is required to come to clear conclusions.

Data analysis and problem-solving are among the most sought skills in the marketplace. A clear understanding of processes and waste elimination can mean massive savings for your company.

You might want to check out a post I wrote about the different types of waste to know more about how to improve your business.

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