When it comes to “waste”, we often think of time, money or materials. In fact, activities that do not create added value are considered wasteful.
When it comes to “waste”, we often think of time, money or materials. In fact, waste can be in a much wider range, for example poor quality products, redundant activities or not creating added value, etc.
Activities that do not create added value are considered wasteful. 8 major waste groups can be identified in productivity improvement according to the overall productivity model as follows:
When a worker or a device is unable to carry out his or her job due to waiting for another activity to finish (of the previous process) or waiting for materials to arrive wasting time to wait.
A few examples show that these wastes occur quite frequently in the operation of the business:
+ A worker stands on the machine after putting a material into the machine, he waits while the machine is operating. When the machine finishes processing the material, he keeps putting the other material in and waits again. The waiting time is wasted.
+ A device is operating, the bearing is broken, the device must stop working until another bearing is replaced. The waiting time for this replacement is also a waste of business.
+ A device may also have to wait for the job because the operator must adjust it before each work cycle. This is also a type of waste due to equipment waiting.
These phenomena can be caused by many reasons: inadequate planning, unreasonable work organization, lack of necessary control, etc. All of the above wastes are the cause of reduced productivity of enterprises. .
Defective products not only lead to direct costs for the business, but also entail indirect costs. A faulty product can have three solutions: Convince customers to accept cheaper prices; Repair or remake and Removed.
Obviously, repairs, reworks or removals all lead to increased direct costs of the business. These costs will be charged to the input cost and as a result, productivity decreases as inputs increase while outputs remain constant. For the first solution, producing defects can create more serious indirect costs. It is the reputation of the enterprise’s product that will be lost in the minds of its customers. It can be said that this is the biggest loss for any organization because creating a product image is very difficult but to lose it in a moment. In addition, manufacturing defect can lead to other indirect costs such as opportunity cost (not meeting requirements of delivery time) or storage costs, etc.
This may be the cause of unreasonable workplace arrangements. For example, an employee at the end of his or her work must transfer the product to another employee to complete the next stage in a place not close to where he works. If he had to move dozens of times a day, that travel time would not create added value and increase the hard work for the workers.
The movement of a product from one place to another does not create any value for itself. For example, moving a material from the main warehouse to the stockpile before putting it into the processing line and then putting it into the production workshop does not change in value. Meanwhile, businesses still have to bear the shipping costs.
Obviously, excess movements have an effect on productivity and need to be minimized. There are several methods to overcome this type of waste: reorganizing the workplace, applying better material handling, applying 5S and automating production lines, etc.
If a business has a warehouse full of raw materials, semi-finished products or finished products, that business is wasting large sums of money. Excessive inventory means the business is stagnant which could have been used for other important purposes. On the other hand, a lot of storage also leads to other costs such as renting warehouse space, maintenance costs or expenses due to damage, etc.
The large inventory can be due to many reasons: unreasonable production plan or material input, wrong market demand forecast, etc. Therefore, the accurate calculation of the necessary inventory is important to any business. Many businesses have adopted Just-In-Time production system to avoid waste of inventory.
Overproduction comes in two forms, producing earlier than required or producing more than required. Overproduction leads to the risk of unsold products, obsolete products, degraded quality or no customers, leading to cancellation. This is a huge waste. Or if the product can be sold, it is also a waste of inventory. Excess production is considered the most serious type of waste in production.
The cause of the overproduction may be due to: incorrect forecasting of the market demand, overproduction production due to insufficient quality, etc.
The waste of excess production is not only associated with production activities but also occurs in offices. They are expressed in the form of wasting too many forms, paper, books or documents, etc.
This can be considered as a waste that is hard to see and is largely hidden in the daily activities of each person. For example, with the same work, each person has different solutions and different time to complete the work. Everyone ends up getting results, but some people have to spend more time and resources completing tasks. That is waste.
To identify those types of waste, at work, managers as well as people who directly perform the work need to think to apply better ways of working. In other words, the need to always innovate methods to work more efficiently.
When a worker picks up a product detail, puts it down, or searches it, it creates movements that do not add any value to the product.
If we can reduce the maximum movement and still be able to get the job done, it means that we reduce the waste and increase productivity.
This requires work and movement studies to properly arrange work, details, and tools to minimize worker movements without adding value.
It is a waste to not use all of the employees’ minds, creative skills and experience. Waste of talent leads to: high absentee employees, poor product quality, high employee replacement rate, poor job satisfaction.
The manifestation of the perceived waste of talent: There is no mutual learning; do not share experiences and methods; No creative ideas; no cooperation; lack of participation in groups; I don’t know what other people’s skills are like and don’t use.
The cause of wasting talent may be: the training is not suitable for the job; inefficient internal information exchange system; lack of guiding goals to not attract workers; difficult mindset; Innovative ideas are not evaluated and responded to; in organizations lack trust and empowerment.
To minimize the waste of talent, businesses need to pay attention to solutions to encourage employees and build a culture of innovation and sharing in the enterprise.
The above wastes are typical wastes in an enterprise. Enterprises cannot be called as having labor productivity if there is a lot of wastage in providing services.
Sources of waste can range from inefficient design, inappropriate technology, wrong material selection, inadvertent work, poor management policies and a lack of awareness of waste.
Minimizing wastage generation at the source is the most effective preventive approach. Preventive solutions may include: using statistical tools in quality control to prevent product defects; application of clean technology to minimize pollution; share information with workers to encourage them in reducing waste; develop products that meet market requirements and apply a batch size reduction system to produce a single product line.
Resources need to shift from high-cost activities to high value-added activities.
Source: VNPI
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