Lean Manufacturing and Seven Types of Waste

By Lubomir Mraz | June 25th, 2024 | 5 min read

Henry Ford spearheaded the concept of lean manufacturing in the early 20th century when he created an repeatable production process focusing on predictive maintenance and the waste caused by excess downtime. Though commonly pictured as a moving assembly line, modern manufacturing processes still apply much the same process to create more efficient workflows. Toyota’s own production system, created by Kiichiro Toyoda and Taiichi Ohno, was modelled on the same concept.

In the 1930s, Ford’s production efficiency was ten times higher than Toyota’s. That’s because Ford’s mass production system was designed to make huge quantities of a limited number of models. That’s why all Ford Model Ts were originally black – they all came from exactly the same production line with identical processes.

Before the Second World War, Japan’s car market was undeveloped, largely because there was insufficient consumer demand to dedicate an entire manufacturing line to a single model. Instead, Toyota needed to produce several models in smaller quantities on the same assembly line.

Whereas Ford had the huge US market, as well as the wider intentional market, at his disposal, Toyota didn’t. As such, they needed to adapt Ford’s manufacturing system to their economic environment, while ensuring quality, reducing costs and lead times, and remaining as flexible as possible.

Ford’s system centered on pushing large quantities of parts and materials into inventories and pushing them on to the next stage of the production process. Taiichi Ohno, the father of TPS, however, knew that Toyota couldn’t afford to have such a substantial part of the company’s budget tied up in inventory. Confronting this challenge, Toyota realized that, by reducing lead times and focusing on production line flexibility, you can achieve improved quality, better customer experiences, enhanced productivity, and optimal use of space and equipment.

“If some problem occurs in one-piece flow manufacturing, then the whole production line stops. In this sense, it is a very bad system of manufacturing. But when production stops, everyone is forced to solve the problem immediately. So team members have to think, and through thinking, team members grow and become better team members and people.” – Teruyuki Minoura, former President, Toyota Motor Manufacturing, North America

The Toyota Production System thus became a foundation for lean manufacturing. It’s often represented as a house with two pillars. One pillar represents the concept of ‘just-in-time’. The other represents ‘jidoka’ – a Japanese word referring to a principle of machine design in which machines automatically stop working if they run into a defect or abnormal process condition. In the center is the principle of continuous improvement.

TPS starts with the customer. More than anything, it’s a cultural movement, in which decision makers continuously ask ‘what value are we bringing to customers?’. Ultimately, the only thing that adds that value is translating the physical transformation of a product into something that the customer actually wants.

We can’t talk about lean manufacturing without covering the Kaizen Methodology. Kaizen is synonymous with continuous improvement, and it’s widely considered to be the foundation of all lean manufacturing techniques. It’s about continuously improving processes, products, and people at every level of the organization.

Eliminating waste is the benchmark of any successful company, especially in resource-heavy industries like manufacturing. Being aware of the main sources of waste will help you prepare for and find alternatives for more profitable and sustainable processes.

The challenge lies in identifying the right waste to eliminate. A further complication is that some aspects of the manufacturing process won’t directly bring value to the customer, yet they might be intrinsically linked to the quality of the final product. For example, if your business creates a revolutionary new product, patenting it to protect it from copycats won’t directly benefit your customers; however, it does increase the chances of your product being highly valued as a one-of-a-kind offer. As such, most manufacturers consider patenting a necessary action.

When it comes to manufacturing processes, we can distinguish two primary output categories. First, we have the necessary output, which is anything that enhances the quality of the final product and the value it brings to customers – such as testing, planning, and reporting. Then, we have actual waste, which is any unnecessary process, function, or material that adds no value to the final product.

Let’s take a look at the seven types of waste as defined in the TPS: 

is the value loss to scrap, repair, and rework due to an unusable product that deviates from specifications. This occurs when a product, process, or information flow is not right the first time.

Defects are best avoided, as they cause parts to be scrapped or reworked, wasting time and resources, especially when defects can be reduced to minimal levels with proper planning.

occurs when the excess stock held by companies (easily accessible in the case of an emergency, such as supplier delay) remains unused.

involves complicated machinery or employee movements, which are unnecessary and time-consuming. On top of extending lead times, improper movement can cause injuries, and it doesn’t add any value to the manufacturing process.

It’s often better for companies to focus on making as few ‘moves’ as possible when finishing the production of goods, as this will decrease costs in the long run.

occurs when resources or materials are transported back and forth. For example, the raw materials needed to create car bodies being sent to a processing plant, or the painted bodies being moved to storage before being taken to the assembly plant.

The excessive transportation of materials can be extremely costly and even damage the product, meaning additional costs could arise from repairs, time, space, and other areas. It’s best to minimize transportation.

occurs when companies produce too much stock, leading to issues selling all of it, which may even happen at a loss. Anything the customer is unwilling to purchase also counts as overproduction waste.

Overproduction is perhaps the most devastating type of waste, as it causes and influences other forms of waste. For example, excess produce needs to be kept in storage, meaning it needs to be transported, thus increasing the risk of damage to stock and employees when moving.

arises when adding extra features to a product that won’t bring any additional value to a customer, thus increasing business costs at no benefit whatsoever.

A product should include only the features necessary to deliver value to customers, thus protecting profit margins and helping to keep products functional and reliable.

is the most recognizable type of waste, occurring when goods or tasks are not progressing as they should. Wait times can occur at any stage of the production process, such as waiting for goods to be delivered, equipment awaiting repair, or a document needing approval.

A fundamental goal of TPS is to eliminate waste. However, just focusing on waste will not create a high-performing business.