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Lean means no waste.

By consultantsmindadmin | February 11, 2014

This is the most important thing you need to know as an operations consultant. Bold
statement I know, but Lean is such a pivotal and fundamental point that it cannot be
overstated. It is a philosophy of management, corporate culture, set of tools, and a useful way
to think of process improvement. While six sigma focused on reducing variability making
everything the same lean takes the opposite approach.

Whats critical-to-quality (CTQ)? Lean is obsessively focused on doing only what is

critical and what is valued by the customer. The way of thinking inherently believes in
opportunity cost. You should only do what matters (to the customer). Put another way, if the
customer wants 100, you should deliver 100. If you deliver 110, you wasted effort. While
marketers would argue that you should exceed expectations and over-deliver, the lean
consultant disagrees. The lean fundamentalist asks, What is the customer really willing to
pay for? Anything more than that is really waste.

How do you know what the customer wants? Simple, ask.

There are lots of waste. Clearly, there are many different ways that people waste time,
money, resources, but a here is another way to think about the problem. The acronym is a
simple T-I-M-W-O-O-D, but the Japanese call it MUDA.

1. Transportation: Moving the product around unnecessarily is a waste of time, effort,

and increases the likelihood that it will be damaged
2. Inventory: Any unused materials is wasted capital. It is money just sitting around in
the form of raw materials (0% complete), work-in-process (50% complete), or
finished goods (100% complete).
3. Motion: The wear and tear on the equipment or the people involved in the process.
If you are transporting the product around unnecessarily, you are also wasting the
motion of the trucks, fork lifts and warehouse workers.
4. Waiting: Time that the product is sitting there not being transported or processed.
This is a large source of waste in physician offices.
5. Over-processing: Doing more to the product than is necessary.
6. Over-production: Making more than is necessary, usually because the production
batches are too large
7. Defects: Imperfect production that requires re-work, or doing work again

This might sound very text book, and it is. Its just a TIMWOOD way to remember all the
different types of waste, not just of material, but also of time and movement.

An office example: A patient drives to the doctors office, but goes to the wrong office
(wasted transportation) and brings a lot of unnecessary paperwork not needed (over
processing). The physician is late, so the patient waits an extra 20 minutes (waiting), and the
nurses are chatting because they dont have any work (inventory). The physician orders 3
blood samples, but the phlebotomist takes 4 samples just to be safe (over production), while
also missing the vein for the blood draw (defect).

Consultants are bad at this. Many of us are perfectionists by personality. While it makes sense
to fiddle with PowerPoint slides until they are coherent, smart, data-driven narratives, but is it
really necessary to have a perfect email box? Is it a must-have to have the excel data file neatly
organized with beautiful, perfectly aligned, shaded in column headers? Are you really making a
difference by reading the 5th piece of research that says the same thing? Think, and abbreviate
your actions.

What does the client value? When possible, ask yourself what the customer values and is
willing to pay for. Likely, client are more willing to pay for recommendations that can
implemented, not sparkling analyses. Find the CTQ, and get rid of the MUDA.