Understanding ‘Losses’

Without understanding the concept of ‘Losses’ it is hardly possible to make a Makigami

Anything that is not adding value in a process is a loss.

Lost time, lost resources, money, materials, energy etc.

To help differentiating ‘Value’ from ‘Non-Value’ (the ‘Losses’), it helps to identify different kinds of losses.

To give you an idea what kind of issues you will be looking for in your analysis I give some examples of widely used loss-categories. If you are used to one of them, you may just keep using it. Otherwise I suggest to use the list below which I usually use in my workshops.

Most of the loss-classifications are based on the Japanese ‘Muda – Mura – Muri’ classification:

Muda: ‘Waste’

Any activity in your process that does not add value. MUDA is not creating value for the customer. In short: WASTE

Type I muda: Non-value-added tasks which seem to be essential. Business
conditions need to be changed to eliminate this type of waste.

Type II muda: Non-value-added tasks which can be eliminated immediately.

Mura: ‘unevenness’

MURA: Any variation leading to unbalanced situations. In short: UNEVENNESS, inconsistent, irregular.

Mura exists when workflow is out of balance and workload is inconsistent and not incompliance with the standard.

Muri: ‘Overburden’

Unreasonable, impossible, overdoing and overburdened.

Any activity asking unreasonable stress or effort from personnel, material or equipment. In short: OVERBURDEN

For people, Muri means too heavy a mental or physical burden. For machinery Muri means expecting a machine to do more than it is capable of or has been designed to do.

Usually the three of them cannot be seen separate. When a process is not balanced (mura), this leads to an overburden on equipment, facilities and people (muri) which will cause all kinds of non-value
adding activities (Waiting is also an activity!!) thus leads to muda.

To eliminate MURA and MURI larger parts of the system need to be looked upon, not only a process or process step or operation but at an entire Value Stream.
Makigami, VSM or ‘Process Kaizen’ eliminates MUDA.

The Seven Deadly Losses

  1. Defects
    • Anything that is not 100% within the specifications.
    • This presumes there are very clear specifications. In most (business) processes there are no- or very poor specifications: If so you will have to set them!
  2. Waiting
    • Looking from the object floating through the process, it is waiting the vaste majority of the lead-time: In other words, while the customer is waiting for this object, the object is waiting for somebody to process it…
  3. Checking
    • When checking three are two options: The work was done correct; the check was inveine. Or the work was not done correct and you are too late. Or you THINK it was OK (or not) while it wasn’t. 
    • When you are not capable doing your business correct, why do you believe you can do the checking correct?  
  4. Rework
    • You already invested ALL cost into the product and now you start adding money again. There goes your profit! And your planning! And your flow….
  5. Stock / Stack
    • Instead of flowing the product as fast as possible in one go to the customer, we add resources to keep it from going to the customer where it will be exchanged for money. This is a huge money-drain in most companies.
  6. Over-processing
    • Adding more resources (work, material) into the product than essentially required.
  7. Movement
    • Moving it doesn’t make the product, the information, better or more valuable
    • IF you move it, make sure each movement is immediately follow by addition of value. at least now the movement is part of the flow.

Is it not just about cutting cost?

The traditional approach is: “When cutting cost, we earn money”. Mathematically this is true.

You step on the gauge and discover you are far too heavy, cut of a leg, gauge again and discover: ‘Aha that is better!’

A too simple reasoning? Indeed! And yet it is being applied over and over again. Look at the impact of many of such ‘cost cutting measures’ on the whole ‘system’. What were the consequences? All of them… Motivation, workload, loyalty, sustainability, quality etc… What was the long term effect?

Eliminating losses is something quite different from cutting cost.

! When eliminating losses, the cost will automatically go down, while at the same moment the ‘system’ will run easier because it is freed from a burden.

But more important is the fact that eliminating losses means you have to know where the ‘value’ is hidden. Eliminating losses cannot be done without having focus for the value.

In other words: having focus on the elements that make the difference for our existence.

This course has been written from a firm and unshakeable belief:

! Quality, Safety and Profit are a RESULT and not something that can be directly raised. There is no switch to turn on when quality, safety or profit are demanded. It is a predictable and inevitable result of something else: Solid and smart designed processes.

The Seven Deadly Losses

  1. Defects
    • Wrong or incomplete information
    • Wrong appearance
  2. Waiting
    • for data, for other ‘steps’
  3. Checking
    • Collecting signatures
  4. Rework
    • Copying, altering
  5. Stock / Stack
    • Piles of files, WIP
  6. Over-processing
    • Searching
    • Non-standard procedures
  7. Movement
    • Documents traveling around
    • illogic filing systems
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