Waste Identification includes assigning process steps to the following labels:

• Value-Added
• Non-Value Added but needed, and
• Non-Value Added and not needed.

Identifying which label these tasks fall under can allow you to remove the "Non-Value Added and not needed" tasks, therefore improving the overall process.

Value-Added Steps

• An activity that transforms or shapes material or information,
• And the customer wants it,
• And it's done right the first time.

Non Value-Added — Needed Steps

• Activities causing no value to be created, but which cannot be eliminated based on current state of technology or thinking.
• Required (regulatory, customer mandate, legal).
• Necessary (due to non-robustness of process, currently required; current risk tolerance).

Non Value-Added - Not Needed Steps

• Activities that consume resources but create no value in the eyes of the customer.
• Pure waste.
• If you can't get rid of the activity, it becomes a "Non-Value Added - Needed Activity."

Eight Different Types of Waste

When reviewing processes, we look for eight different types of waste. These wastes add cost to the business without adding value to the customer.

1) Defects

Producing defective work that needs to be redone is waste.

Examples include:

• Redoing applications, errors in work
• Order entry errors
• Design errors
• Order changes
• Employee turnover

Possible ways to eliminate this waste:

• Establish standardized work procedures and office forms
• Create and post job aids

2) Overproduction

Producing too much of something or producing it before it is required.

Examples include:

• Producing services or information that no one needs or uses.
• Printing paperwork before it is needed.
• Purchasing items before they are needed.
• Processing paperwork before the next person is ready for it.

Possible ways to eliminate this waste:

• Establish a workflow sequence to satisfy the downstream customer.
• Create workplace norms and standards for each process.
• Create signaling devices to prevent early processing.

3) Waiting

Waiting for anything: people, paper, machines, or information.

Examples include:

• Waiting for information or a process to be completed
• System downtime
• System response time
• Approvals from others
• Information from customers

Possible ways to eliminate this waste:

• Review and standardize required signatures to eliminate unnecessary ones.
• Cross-train employees to allow workflow to continue while somebody is out.
• Balance the workload throughout the day to ensure optimal use of all people.
• Make sure the equipment and supplies are available.

4) Neglected Human Talent

Not striving to improve process, rather maintaining status quo, is waste.

Examples include:

• Limited employee authority and responsibility for basic tasks.
• Management command and control.
• Inadequate business tools available.

Possible ways to eliminate this waste:

• Question the process and the way things are done.
• Take the risk necessary to apply new thinking to a process.
• Encourage local teams and workgroups to make process improvements.

5) Transportation

Transporting something further than necessary or temporarily locating something is waste.

Examples include:

• Unnecessary report routing
• Excessive e-mail attachments
• Multiple hand-offs
• Multiple approvals

Possible ways to eliminate this waste:

• Make the distance over which something is moved as short as possible.
• Eliminate any temporary storage or stocking locations.

6) Inventory Excess

Excess stock of anything that takes up space, can hurt safety, or may become obsolete.

Examples include:

• Obsolete or redundant data
• Office supplies
• Batch processing transactions
• Sales literature

Possible ways to eliminate this waste:

• Produce only enough to satisfy work requirements of the customer.
• Standardize work locations and the number of units per location.
• Ensure that work arrives at the downstream process when required and does not sit there.

7) Motion

Any motion that is not necessary to the successful completion of an operation is waste.

Examples include:

• Unnecessary motion
• Walking to and from the copier.
• Central filing.
• Walking to and from the fax machine.
• Walking to and from other offices.

Possible ways to eliminate this waste:

• Standardize folders, drawers, and cabinets throughout the office area.
• Arrange files in a way that they are easily referenced.
• Arrange work areas of office equipment in central locations.
• Purchase additional office equipment.

8) Excess Processing

Processing things that the customer does not want or that do not add value for the customer.

Examples include:

• Obsolete or redundant data on shared drives
• Re-entering data
• Extra copies
• Unnecessary/excessive reports
• Month-end closing activities
• Multiple approvals

Possible ways to eliminate this waste:

• Review value-added steps in each process and eliminate steps wherever possible.
• Review all signature requirements and eliminate signatures wherever possible.