The Business Book

(Joyce) #1


materials and work-in-progress is
considered wasteful because of the
associated space and staff costs.
The third type of muda that
Shingo identified is movement. In
some factories, workstations are
badly designed, and employees
spend time doing things that do not
add value to the product, such as

looking for tools, walking from one
part of the factory to another, or
bending to pick up parts. This type
of waste increases cycle time—the
time taken to produce a unit of
output. Longer cycle times lead to
lower productivity, which in turn
drives up unit labor costs.
The fourth muda is time spent
waiting. Delays may occur when
machines on a production line are
poorly coordinated, resulting in
bottlenecks. Time might also be
wasted resetting machinery to
produce a different part.
The fifth muda is transportation.
Time and money spent moving
work-in-progress from one factory
to another will drive up costs, and
this is unlikely to add value to the
product, so it is wasteful.
The sixth example of muda is
overprocessing. Consumers will
only pay for the product features
that they value. Producing complex,
overengineered products is wasteful
because it creates additional costs
without any extra revenue.


Holding goods in stock is a cost for
a company, since warehouse space
and employees need to be paid for. In
addition, cash tied up in stock could be
in the bank instead, earning interest.

The final muda is the production
of defective items. Substandard
products signify waste of time and
resources, and mean that further
inspection processes are required
and the products must be reworked.
In addition to the seven types of
muda, Toyota identifies two other
potential problems: mura and muri.
Mura is uneven flow in a process,
leading to unbalanced working
practices. Muri is the overburdening
of people or equipment.

Lean strategy
Using these insights, production
engineer Taiichi Ohno developed
the Toyota Production System
(TPS). This lean production method
counters waste in the production
process by producing more using
less. It enables a manufacturer to
increase output without having to
pay for extra labor, raw materials, or
capital. Alternatively, a business
can use lean production techniques
to make a better-quality product
that will sell for a higher price.

Muri, mura, and muda are three
Japanese terms identified by the
Toyota Production System as
problems to avoid. Muri refers
to the overburdening of
individuals or teams, which
is inefficient; mura means
an unbalanced work flow,
which can cause
bottlenecks in supply;
and muda are all the
areas of waste
in a system.

A just-in-time supply system
eliminates muri, mura, and muda
from the production system, so that
teams receive materials as they
need them and waste is avoided.




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