What is Value and Waste in Lean Manufacturing?

In order for a company to gain and maintain a competitive advantage, it needs to be customer-oriented. This is why many businesses today are turning to applying Lean thinking to their business processes. The lean journey of businesses starts with defining value, that is, defining what customers are willing to pay for. In Lean thinking, anything that the customer does not value is defined as “waste” or “non-value adding”. The journey then continues with efforts to reduce or eliminate waste.

What is Value in Lean Manufacturing?

Lean manufacturing is a concept that has gained great popularity in a wide variety of sectors with the positive effects it creates on the overall performance of companies. It helps organizations reduce costs, improve processes and increase quality. But what really makes Lean effective is its focus on value.

According to Lean, value should always be evaluated from the customer’s perspective. If the customer doesn’t see a product or service as worth paying for, then it doesn’t matter. However, value is not only about the price the customer is willing to pay. The product must also fulfill the customer’s need. Hence, in order for a product or service to be valuable, it must both fulfill the customer’s need and be worth paying for.

What is Waste in Lean Thinking?

Waste in lean manufacturing refers to any activity that consumes resources but provides no benefit to the end customer, i.e. does not add value. Any wasteful activity harms customer satisfaction and reduces the profitability of businesses. Therefore, it is necessary to identify non-value added activities and improve processes to eliminate them.

Once businesses understand value and waste, they can map their business processes and focus on identifying value-added activities and wasteful activities. By increasing high value-added activities and eliminating waste, it becomes possible to meet customer expectations.

How Can You Identify Value-Added Activities in Lean Manufacturing?

Value-added activities contribute to the transition of a product from raw to finished form in the shortest time and at the lowest cost. For an activity to be considered value-added, it must meet three criteria:

  • It contributes to the completion of the product.
  • It is an activity for which the customer is willing to pay.
  • For an activity to be value added, it must be done right the first time. In other words, the activity does not require rework due to any defects. Neither the customer nor the business needs to spend extra effort to make the activity better.

Non-value-added activities negatively impact productivity by delaying the delivery time of products. They require rework, make customers unwilling to pay for the product/service and as a result burden the business.

How Can You Identify Waste Activities in Lean Manufacturing?

7 Wastes of Lean

Eliminating waste improves performance and efficiency, resulting in satisfied customers. There are seven types of waste in the lean methodology. These wastes need to be eliminated or reduced. These wastes are as follows:

  • Transportation: The unnecessary movement of equipment or materials from one place to another.
  • Inventory: Excess inventory due to non-delivery, waiting, overproduction, etc.
  • Movement: Unnecessary extra movement of employees.
  • Waiting: disruption of work due to equipment failure, lack of materials or preparation of documents.
  • Overproduction: Production in excess of demand.
  • Over-processing: spending more time than necessary on any task.
  • Defects: Defective products are returned and reworked or remanufactured.

To eliminate waste to the maximum extent, it is necessary to audit your business processes and find the factors that cause waste.

Lean Tools to Identify Value and Waste

There are many Lean techniques that businesses can use to improve business processes and reduce waste. These techniques help to identify value-added activities and identify waste.

Commonly used lean tools are as follows:

Value Stream Mapping

VSM visualizes the steps in the production process of a product or service and analyzes the value creation capacity of these steps. Through this mapping, businesses can clearly see the steps that create value and those that do not and identify the source of waste.

5 Whys

The 5 Whys technique is a common technique used to identify and solve problems. With this technique, businesses can identify the factors that cause waste and seize opportunities for improvement.

Gemba Walks

“Gemba” means “real place” in Japanese and refers to the place where business processes actually take place. In this technique, senior management goes to the place where the work is done and observes the processes. From there, they can communicate with field workers to get a clear picture of where value is created.

5S Methodology

Another important tool is the 5S Methodology. This methodology offers a five-step process to ensure that the workplace is organized and efficient: Through the five steps of 5S, businesses can get rid of unnecessary materials and processes and create a more effective working environment.

Lean Manufacturing Software

Benzer Bloglar

What is Total Quality Management?

Today, when competition is very high, businesses always aim to keep quality at the highest level in order to increase their profitability and satisfy their customers. Businesses that can provide quality remain competitive and achieve sustainable success, while other businesses cannot achieve the success they want. In the 1950s, Total Quality Management, the widely known […]

Read More

What is 8D Problem Solving?

The Eight Disciplines (8D) is a problem-solving methodology that aims to find the root causes of defects and problems, produce solutions to recurring problems, and eliminate problems. It is possible to improve quality and reliability with the 8D if a product is defective or does not satisfy the customer. First developed by Ford Motor Company […]

Read More

5 Steps of Lean Manufacturing

Lean Manufacturing aims to increase efficiency and minimize waste in the modern business world. Inspired by the Toyota Production System, this approach is based on customer satisfaction and continuous improvement. Lean manufacturing helps businesses reduce costs while increasing operational efficiency and consists of several steps. Lean Manufacturing Steps 1. Value Definition: Value is created by […]

Read More

What is FMEA (Failure Mode and Effects Analysis)?

FMEA stands for Failure Mode and Impact Analysis. It is a risk analysis method used in many sectors, including healthcare, automotive and aviation, to identify potential risks in a product or process and the consequences that may arise from them. Failure mode (FM) indicates potential errors that may occur in a product or process. Effective […]

Read More

9 Effective Quality Improvement Techniques

In today’s increasingly competitive business world, the importance of product and service quality is more important than ever. Quality improvement tools are methods used to improve an organization’s processes or to measure and increase quality. Quality management provides customer satisfaction, increases the efficiency of businesses, reduces costs and helps sustainable growth. These tools proactively identify […]

Read More

Ways to Encourage Employees to Give Feedback

Receiving feedback from employees is one of the important steps of being a successful business. A positive feedback culture offers a more objective and efficient perspective from managers to staff, from plans to processes. The basis of this understanding is to increase general and individual productivity, improve internal communication, and strengthen employee loyalty. What is […]

Read More