Process Innovation: The Seven Wastes

Once we are finished using the Canvas to describe the purpose, inputs, process and outputs of our process, we can start innovating.  Innovation is really a game of driving waste from the process.

We can look at the value of the process, and the outputs and steps used to create it and see there are three types of steps and outputs:

A. Steps that definitely create value.
B. Steps that create no value, but are necessary given the current state of the system.
C. Steps that create no value and can be eliminated.

Of these, B and C create waste.  The Japanese have termed waste muda and categorize it into seven types:

1. Overproduction: Producing more than is needed, faster than needed or before needed.
2. Waiting: Idle time that occurs when co-dependent events are not synchronized.
3. Transportation: Any material movement that does not directly support immediate production.
4. Processing: Redundant effort (production or communication) which adds no value to a product or service.
5. Inventory: Any supply in excess of process or demand requirements.
6. Motion: Any movement of people which does not contribute added value to the product or service.
7. Defect: Repair or rework of a product or service to fulfill customer requirements.

We often think of waste number 7 (defects), but rarely think of the other six.

All of these wastes are present in every process.  For example, in medical claim processing we find mailing paper documents (transportation), claims held up waiting for more documentation (inventory), staff who only work special claims (inventory – yes staff is inventory), time spent waiting for supervisor approval (waiting), checking balances multiple times to see if it has changed (over-processing), generating multiple invoices (overproduction), creating electronic and paper records (overproduction) and incorrect billing (defects).

So now we can identify the wastes – those steps or outputs that don’t contribute to the overall value of the process.  Our next post will discuss a simple way to innovate in the process, using a tool called SCAMPER.