One of the basic concepts in Lean thinking, if not thé underlying concept, is the concept of “waste”. A recent discussion on LinkedIn made me rethink the way in which I treat this important notion when working on improvements with client teams. The discussion centered around the translation of the word “muda” meaning “unnecessary”, and whether this should be the criterion for labeling an activity as “waste”. In my work I do look at “necessary” vs “unnecessary” but I do not consider it the main criterion for identifying targets for improvement, thereby lowering cost and reducing lead times. I will try to explain my standpoint in this post.
The concept of “waste” in the Toyota system goes back a long way. After World War II, Kiichiro Toyoda, then president of the Toyota Motor Company, said, “Catch up with America in three years.” Ohno describes how he figured out that the difference in productivity between American and Japanese workers must have been something like one to nine and how he wondered how an American worker could exert nine or ten times more physical effort. He concluded that the Japanese were wasting something and that if they could eliminate this “waste”, productivity could rise by a factor of nine or ten. This idea marked the start of the present Toyota production system. Eliminating waste became Ohno’s single most important objective when he took charge of production management at Toyota after World War II. But what is meant by “waste”?
Work and Waste
The first thing Ohno distinguished between was “work” and “waste”. At Toyota, the verb “to work” is defined very precisely. It means that we make an advance in the process and enhance the added value. Or to quote Adam Smith, who in 1776 already said that “there is one sort of labor which adds to the value of the subject upon which it is bestowed: there is another which has no such effect. The former, as it produces a value, may be called productive; the latter, unproductive labor.”
Shingo stated: “Waste refers to everything not serving to advance the process, everything that does not increase added value”. And Ohno wrote that waste refers to all elements of production that only increase cost without adding value.
It is important to note that you enhance the value of the subject, e.g., the individual item a worker or a machine is working on. It is not about the overall performance of a process or organization. So, when you inspect finished items and ensure defectives are not passed on to the customer, you may see it as improving performance, however, it does not increase the value of the items that are passed on to the customer. In fact, it increases cost, even if – compared to not inspecting – it might result in lower costs than not inspecting at all.
So, “work” advances the process, i.e., it moves the individual item forward in the process, closer to its completion, so that it can be of value to the consumer or user of the item. Anything that does not advance the product in terms of completion can be seen as “waste”.
“Wasteful” are operations unnecessary for the work and which can be eliminated immediately. Examples are waiting or time on hand and meaningless transport (stockpiling intermediate parts, transport to a place other than the destination, and changing hands). It is interesting to note that transport to the place of destination is not seen as “waste” but as “work”. This brings us to another distinction made in the Toyota Production System, which is the difference between value-adding (VA) and non-value-adding (NVA) work.
As mentioned, “work” advances the process. And to come back to the earlier example, transport to the destination is actually seen as “work” not as a purely wasted motion. However, at the same time, transporting a piece to its destination does nothing to enhance the value of the item in itself. In other words, it does not add value to the subject. For instance, walking to pick up or receive parts, opening the package or removing wrappers ordered from a supplier, removing parts in small quantities from a large pallet, operating pushbuttons, and so forth. They must be done under the present conditions and to eliminate them, these conditions must be partially changed. In another LinkedIn discussion, Jörg Münzing used the word “avoidable”, which I like. It means that the activity is currently done, and might be very necessary under the current circumstances. But when changes are made that lift certain constraints, change these circumstances, or that bust existing assumptions, these activities could very well be eliminated; they are “avoidable” and therefore constitute “waste”.
I personally like to challenge teams by imagining what their operation would look like if the factory would be empty (no work-in-progress) and they were asked to just make a single item in an end-to-end one-piece flow (OPF). And to then think about how long it would take to get their customer their desired product. End-to-end OPF constitutes a kind of ideal setup for an operation, as it leads to perfect flow (I recommend reading my series on “perfect flow” on my sister website from THE JIT COMPANY. And striving for “perfect flow” will expose all the constraints that lead to the “avoidable” activities, and will help organizations to continually improve their operation. As I often say: “kanban is the engine of kaizen”.
So, even though these “avoidable” and “necessary” activities can be seen as “work”, they are considered non-value-adding (NVA) in the TPS. True value-adding work means some kind of processing – changing the shape or quality, nature, or character of a product or assembly. Processing adds value and these processing operations are referred to as net operations by Shingo. Shingo identified four kinds of operations: processing, inspection, transportation, and storage. Only processing adds value. In processing, the raw materials or parts are made into products to generate added value. Examples of processing are assembling parts, forging raw materials, press forging, stamping metal plates, welding, tempering gears, and painting bodies. Anything other than net operations constitutes factors that raise costs.
Shingo thereby also builds upon the motion or therblig study (devised by the Gilbreths in 1924). Therbligs (an anagram of the name Gilbreth, with ‘th’ transposed) thereby are motion elements that are classified into four classes among which only so-called class 1 elements are considered value-adding by Shingo. Class 1 comprises the most essential movements like assembling, disassembling, and forming.
Unnecessary versus Waste
Coming back to the title of this post “understanding muda: unnecessary or waste”, what have we learned?
First, when looking at the activities taking place in an organization, you can identify true “needless waste” as Ohno calls it. Activities that do not advance the product but that are done, nonetheless. This is originally referred to as “muda” or “unnecessary” and they should be eliminated immediately.
Second, there are activities that are necessary and that do advance the product towards completion. These necessary activities are considered “work” in the TPS. However, within work, there are still activities that are performed that do not actually enhance the true value of the actual item despite being labeled as “necessary work”. These activities are seen as non-value-adding or NVA-work and they should be targeted through work improvement. Such improvement includes changing the underlying conditions that make this NVA-work currently necessary, and to render them “unnecessary” and therefore “muda”. They are “avoidable”.
I, therefore, do not agree with the idea of only targeting (currently) “unnecessary” activities or present “muda”. We should also be on the lookout for NVA-work and target the conditions that make these activities currently “necessary” but “avoidable”. If you don’t, I am afraid you leave many improvement opportunities untapped. Looking at it like this, “waste”, in fact, refers to more than just “muda”. So, look out for “waste”, and not only for “muda”!