TERM REPORT

Seven Deadly Wastes That Could Cost Your Company

ANUM ARSHIA
FA14-EX-0060
SEMESTER: SUMMER-15

AUGUST 15, 2015

MBA WEEKEND PROGRAM
MUHAMMAD ALI JINNAH UNIVERSITY KARACHI

Acknowledgement
In the name of Allah, the Most Gracious and the Most Merciful. Alhamdulillah, all praises to Allah for the
strengths and His blessing to me in completing this report.
Secondly, I would like to express my deepest appreciation to all those who provided me the possibility to
complete this report. A special gratitude I would give to my Teacher, Mr. Adnan Maqbool, who taught us
so well so that today I am able to identify the quality in the Business Processes and can even implement
them to bring improvement in the day to day tasks.
Last but not least, my deepest gratitude goes to my beloved parents and also to my brother for their endless
love, prayers, support and encouragement. Also not forgetting those who indirectly contributed in this
report, your kindness means a lot to me. Thank you very much.

Executive Summary
This report is all about continuous process improvement and tips and techniques of achieving improvement.
The main topic considered is one of the techniques of Continuous process improvement which is seven
deadly wastes that could cost the company. Each and every waste is discussed and explained briefly along
with examples.
Continuous Process Improvement is a set of steps to accomplish a defined purpose or produce a defined
product or service. Continuous process improvement is the set of on-going systems engineering and
management activities used to select, tailor, implement, and assess the processes used to achieve an
organization's business goals. Continuous improvement is recognized as a component of modern quality
management.
Identification of waste is main component of continuous process improvement and these waste are minute
waste which actually companies dont give much importance but if they are considered as non-value adding
activities and reduced brings a remarkable increase in the efficiency, productivity and profit levels.
An example of Office Work has been considered to give a clear understanding of deadly wastes.
Organization can perform this activity themselves and even can outsource specialists of lean to bring
improvement in the processes of their organization and increase their efficiency and revenues.

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Table of Contents

Acknowledgement ........................................................................................................................................ i
Executive Summary .................................................................................................................................... ii
Objective ...................................................................................................................................................... 1
Methodology ................................................................................................................................................ 1
Continuous Process Improvement ............................................................................................................. 2
Lean .............................................................................................................................................................. 2
Seven Types of Deadly Wastes ................................................................................................................... 2
Office Examples of the 7 Types of Waste .................................................................................................. 3
Conclusion ................................................................................................................................................... 5
References .................................................................................................................................................... 5

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Seven Deadly Wastes That Could Cost Your Company

Objective
My main objective of writing this report is to study Seven Deadly Wastes and deliver my understanding
regarding the aspects that could cost any company. Understand the concept of continuous process
improvement as TQM is basically finding new opportunities for improvement of processes, improving
them, measuring improvement and then repeating the cycle again and again.

Methodology
I used Internet articles and publications for this report. Collected articles, organized them, filtered and
arranged in a report to have a clear representation of seven deadly wastes.

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Seven Deadly Wastes That Could Cost Your Company

Continuous Process Improvement

Continuous process improvement is the set of on-going systems engineering and management activities
used to select, tailor, implement, and assess the processes used to achieve an organization's business goals.

Lean
Lean principles (or just Lean) focus on the creation of value for the end customer. Lean examines every
activity within a process and filters it through a rigid definition, categorizing it as either value added or nonvalue added.
By definition, if an activity consumes resource time or capital but does not add value, it must be wasteful
and should be eliminated.
In nearly every organization, 95 percent or more of the activities and time in business processes do not
add value. The goal of Lean is to root out these activities and quickly eliminate them.
In practice, Lean principles engages employees throughout an organization, in particular those who know
the actual processes best, to examine processes through the lens of the seven forms of waste. While the
discipline required to implement Lean can often seem counter-cultural, the potential value cannot be
understated.
The bottom line is that Lean focuses on creating processes that produce the right product or service, in the
right quantity at the right time with the minimum amount of effort, resources, capital and time.
Waste is the Enemy of Lean Principles
There are seven widely-recognized categories of waste within processes

Seven Types of Deadly Wastes

Determining seven deadly wastes and eliminating them is one of the continuous process improvement
techniques and tools that are used to eliminate wastages at minor level, as a result of which big drastic
change comes in revenue without any additional cost incurrence. Wastes cannot be totally eliminated but
can be reduced to the minimum. Toyota, the Japanese automobile manufacturer identified the following
seven types of wastes as the most common in industries.

Over Production
Over Production occurs when operations continue after they should have stopped. The results of over
production are;
Products being produced in excess of whats required
Products being made too early
Excess inventory carrying costs

Waiting
Also known as queuing, waiting refers to the periods of inactivity in a downstream process that occur
because an upstream activity does not deliver on time. Idle downstream resources are then often used in
activities that either dont add value or result in overproduction.
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Transport
This is unnecessary motion or movement of materials, such as work-in-process (WIP) being transported
from one operation to another. Ideally transport should be minimized for two reasons;
It adds time to the process during which no value-added activity is being performed.
Handling damage could be incurred

Extra Processing
This term refers to extra operations, such as rework, reprocessing, handling or storage that occurs because
of defects, overproduction or excess inventory.

Inventory
This refers to inventory that is not directly required to fulfill current Customer orders. Inventory includes
raw materials, work-in-process and finished goods. Inventory all requires additional handling and space.

Motion
This term refers to the extra steps taken by employees and equipment to accommodate inefficient process
layout, defects, reprocessing, overproduction or excess inventory. Motion takes time and adds no value to
the product or service.
To move and add value is called work. To move and not add value is called motion. Motion, then, means
moving without working, moving and adding cost.

Defects
These are products or services that do not conform to the specification or Customers expectation, thus
causing Customer dissatisfaction.

Office Examples of the 7 Types of Waste

Type of Waste

Office Examples of Deadly Types of Waste

Defects

Data entry errors. Other types of order entry or invoice errors. Any error that gets
passed downstream only to be returned for correction or clarification.
Engineering change orders. Design flaws. Employee turnover. Absenteeism.

Overproduction

Printing paperwork (that might change) before it is needed. Processing an order

(that might change) before it is needed. Any processing that is done on a routine
schedule regardless of current demand.

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Seven Deadly Wastes That Could Cost Your Company

Inventories

Purchasing or making things before they are needed (think office supplies,
literature...). Things waiting in an (electronic or physical) In Box. Unread email.
Any form of batch processing (e.g. transactions, reports...)

Over-processing

Relying on inspections, rather than designing the process to eliminate errors. Reentering data into multiple information systems. Making extra copies. Generating
unused reports. Expediting. Unnecessarily cumbersome processes (think financial
statement period end close, expense reporting, the budget process...)

Human Motion

Walking to copier, printer, fax... Walking between offices. Central filing. Going
on a "safari" to find missing information. Backtracking back & forth between
computer screens.

Transportation &
Handling

Movement of paperwork. Multiple hand-offs of electronic data. Approvals.

Excessive email attachments. Distributing unnecessary cc copies to people who
don't really need to know.

Waiting

Slow computer speed. Downtime (computer, fax, phone...). Waiting for

approvals. Waiting for information from customer. Waiting for clarification or
correction of work received from upstream process.

Confusion

Any missing or misinformation. Any goals or metrics that cause uncertainty

about the right thing to do.

Unsafe or
unergonomic

Office work conditions that cause carpel tunnel, eye fatigue, or chronic back
pain, or conditions that compromise the health and productivity of workers in any
way.

Underutilized
human potential

Restricting employee's authority and responsibility to make routine decisions.

Having highly paid staff do routine tasks that don't require their unique expertise.
Not providing the business tools needed to perform and continuously improve
each employee's assigned work. Not trusting your people to stop production to
stop and fix a problem. Not trusting your people to be responsible for the
cleanliness, maintenance, and organization of their own work area. Not trusting
people with a flat organization structure of largely self-directed teams. Not
expecting (and measuring) every person to contribute to continuous
improvement.

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Conclusion
All above discussed reasons and causes behind waste and non-value adding activities are under human and
system control and easy to reduce therefore in every type of organization and in every domain of the
business processes these should be reduced for achieving the lean and improved work practices.
Involvement of internal as well as external stack holders is of significant importance in bringing change
and keep it going for long. From Top management to the workers and from suppliers to the customers
everyone should participate in the improvement and waste elimination campaign so that it result in a success
and productivity improvement.

References

http://www.leaninnovations.ca/seven_types.html

http://www.processexcellencenetwork.com/lean-six-sigma-business
transformation/articles/the-7-deadly-wastes-that-could-cost-your-company/

http://www.systems2win.com/LK/lean/7wastes.htm

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