Ranking wastes in Lean for SMEs



Have you heard about waste in lean management? Are you wondering how you could rank them in your business? Do you work for an SME and want to implement lean management? 

Many academic papers discuss the types of waste in lean management, but very few indicate the most prominent ones and which ones to tackle first. 

In a previous article, I wrote extensively about waste in lean management and gave some examples of how they manifest in a product company. 

Today, I am ranking wastes in lean for SMEs based on what I have seen companies suffer the most from. 

Too long, didn’t read?

If you are short on time, I will give you the ranking of wastes straight away:

  1. Behavior
  2. Defects
  3. Overprocessing
  4. Waiting
  5. Motion
  6. Transportation
  7. Talent
  8. Inventory
  9. Overproduction

Read below to understand the reasoning behind this ranking better.

Defining waste in lean management

Waste or Muda (the Japanese term) is whatever set of actions, activities, or interactions that don’t add any value to the final customer. 

Any organization aspiring to become a lean company should aim to identify and eliminate the nine different types of waste.

So, how do I rank the nine types of waste in an SME? 

Ranking the 9 types of waste in lean management

Behavior waste

Behavior waste is any waste created through human interaction that doesn’t add value to the customer. 

In a small company, in my experience, people tend to wear all types of hats and work closely. 

You might be wondering, how is that a bad thing? I want my teams to work with each other and develop good relationships. 

Correct, but beware of potential hierarchical issues and lack of ownership. Let me elaborate. 

If you run a small business, you might not be exactly thinking about lean implementations from day one. Instead, you might be working hard to keep the company solvent and cash positive. 

If members of your team need to wear different hats, frustrations might appear because somebody might have too much to do and some others too little.

It could also mean people might do things for their own advantage rather than for the benefit of the business.

Politics is one of the most devastating forces in any business and one of the biggest catalysts of lousy work culture. 

behaviour waste

How do we fix behavior?

There is a whole science behind the behavioral change. Without getting into complex details, I can give a few tips to change behavior in business based on my experience.

  • Spending time in the hiring process pays off. Don’t just hire the most technical individual or the most accomplished. Hire the person with the most potential and willingness to work and succeed. Technical skills can be learned. 
  • Working on our organizational hierarchy. How are the company’s vision and mission broken down into goals your managers can achieve? Set the standard but allow teams to come up with their solutions.

The most important thing is to develop a positive culture before massively scaling an operation. If your company becomes large enough, it will be much more difficult to change the beliefs and assumptions of people.

Defects waste

Defects are unwanted negative characteristics in your products or services.

Defects lead to over-processing and ultimately to more costs—the cost to put it right, preventing it from happening again, etc.

But most importantly, defects harm your relationship with your customers. 

If you are trying to get more customers to scale up your operation, any defects escaping your production site are compounding against you.

Satisfied customers talk to other potential customers (free PR), so the happier they are, the bigger our chances of getting more business.

Defects waste

How do we fix defects?

  • Spending more time designing processes and procedures to protect customers. We should also include internal customers in this.
  • Ensuring design reviews and a proper risk management system is in place to evaluate all potential unwanted product characteristics. Design and Process Failure Mode Effect Analysis (DFMEA & PFMEA) are extremely useful for categorizing and managing risk.

Even with all these measures, some defects will still manage to get to your product. It is precious to have a great team capable of reacting and correcting issues as they appear.

It goes back to my previous point about behavior and creating a great culture.

Over processing waste

Over processing could be summarized as non-value-added tasks performed to deliver the product or service.

Depending on our customer requirements, we might have to provide documentation or other paperwork to prove something to a client.

This previous statement applies to QC records, certificates of conformance, or project documentation.

These are things required to ensure our customers’ expectations are met, but that doesn’t mean they add value. Let me explain.

In engineering, thanks to statistics, there is a way to prove your ability to repeatedly deliver an excellent conforming product to your customers with something called a capability study.

I don’t want to get into the details of a capability study but, if successful, it allows you to prove the variation in your process, hopefully leading to minimizing quality inspection and the associated paperwork.

In a small company, getting the right expertise might be challenging. It’s also challenging to design your processes from the word go.

over processing waste

How do we stop overprocessing?

  • Designing processes to maximize efficiency. It might not be the first iteration of your operation or the second, but at some point, we must stop and ask ourselves, “Is this the best we can do?”
  • Digitalizing processes. As I mentioned, paperwork is one of the biggest wastes in the current work environment. Evaluate the cost of digitalizing your paperwork. There are brilliant solutions available but make sure they won’t kill your budget.

Waiting waste

Every time we wait for something that prevents us from executing a process, we experience waiting waste.

McDonald’s built a massive franchise on simply low waiting times to receive your food. 

Waiting should be minimized as much as possible, especially in in-line operations like car factories.

Building a car factory might be far away from your short to medium-term goals if you are a small business, but that only means there are other potential risks at our stage.

If we are the type of people that want to have an eye on everything that happens and make sure we double-check everything, I am sure there are people in our business frustrated because they need to wait for us.

waiting waste

How do we fix waiting waste?

  • I sound like a broken record but spending time designing processes. We might be subject to supplier shortages (a good example was the chip shortage in 2021-22), which is out of our control.
  • Once we have clear processes, we need to document them and communicate with our teams. Communication is crucial to ensure we won’t wait for things to happen to do our jobs.
  • Remove friction. We can link this to the previous point around communication. Paperwork, meetings, and emails minimize these types of things.

Motion waste

Motion waste is not referring literally to the transportation of a product from A to B. It refers to any transaction required to move an item to the next customer. 

If you have not had the chance to spend enough time designing the way your operation process works, you might want to spend some time now. 

When your team is small, you might be tempted to be involved in any situation, call, email, or meeting. 

That kind of behavior is detrimental because of 2 things.

  • It doesn’t show you can trust your team to do the right thing
  • It prevents you from focusing on the things you can only do

These two points are directly related to overprocessing, as highlighted above.

motion waste

How do we fix motion waste? 

  • Process, process, and more process design.
  • We must ensure we use our time wisely to help the bottom line and grow the business, not necessarily dealing with paperwork and other non-value-added tasks. 
  • Meetings, calls, emails, etc., combined with unnecessary approvals, are hindering your ability to deliver at speed.

Transportation waste

Transportation refers to the waste created by the movement of materials from A to B.

Imagine you are building a house. You wouldn’t want to have your bricks 2 miles away from where you are building, no?

The less material movement, the better for your production process. This is very specific to product-related companies and not that relevant for the service ones.

transportation waste

How do we fix transportation waste?

  • Our Inventory must be as close to your required process location. As I mentioned before, don’t put your bricks 2 miles away from the house you are building. Keep them as close as possible to you.
  • Increase the batch sizes. Get the largest batch available for our current capacity. Not only will we save money by purchasing larger quantities, but we will also remove transportation costs from the supplier.

Talent waste

We waste talent when we don’t utilize our employees to their maximum abilities.

I am not referring to pushing them to the limit till they break. Instead, I refer to placing people where their skills are better suited to our process.

In a small company, this is perhaps less of an issue since, in my experience, most people wear different hats, and it presents a challenge most employees welcome.

Nonetheless, beware of having people doing jobs they don’t genuinely enjoy.

talent waste

How do we stop wasting talent?

  • Be clear when hiring people about the expectations for the role. We need to be clear about this before we put job adverts out. It’s no good saying we don’t have good candidates when we haven’t been clear about the job specification.
  • Assess people’s skills periodically. Some employees enjoy doing extracurricular activities to develop themselves. It gives them something to strive for and better chances to promote. We need to keep these guys as happy as possible to make our business thrive.

Inventory waste

Inventory waste is when we store products unnecessarily.

It also applies to raw ingredients. If we hold too much of one specific material, we are wasting money on many things:

  • We need more people handling materials in our warehouse.
  • We need a more extensive warehouse.
  • We need more equipment to support the movement of materials.

It’s also an effect of overproduction, but in a small company, inventory should be less of an issue due to budget constraints.

Overproduction and inventory are both at the bottom of the pile in my rankings as budgets seem to be tighter than in larger corporations.

inventory waste

How do we fix inventory waste?

  • Evaluating the current order levels and matching production and supply. We must embrace the just-in-time mentality and engage with suppliers and customers to minimize stocks.
  • Removing current assumptions about potential issues. What if we have a production issue or a supplier issue? Asses the process to minimize risk, but we must try not to panic.

Overproduction waste

Overproduction waste is what we create when we produce more than we need.

This is mainly happening because of the “what-if” mentality.

What if my supplier raises prices?

What if we have an issue with a machine?

What if our customer expects this service?

When your company is small, every dollar counts. This is true for any company, not just an SME.

But if you are working just to become profitable, anything you spend extra could get you closer to bankruptcy. Cash is king.

overproduction waste

How do we fix overproduction?

Generally, this is the least of any company’s worries.

The reason is that overproduction is relatively easy to see, your inventories are full, and you run out of space.

A few things to minimize overproduction:

  • Planning and forecasting. Evaluating past trends or asking customers for delivery schedules is critical to minimize wasting resources on products not required.
  • Improving relationships with the supplier chain. Getting better suppliers or improving the relationships with current ones to minimize issues later on.
  • Removing bottlenecks to increase your throughput. We can analyze what is required in the process step and identify the limiting factors (bottlenecks).


I hope this ranking provides guidance on the wastes in Lean and which ones to tackle first.

What do you think of the ranking? Does it apply to you? Let me know in the comments below.

Related posts

Leave a Comment