It appears that innovation, while far from a new concept, is now the hotly sought after ‘ingredient’ that organisations are desperate to harness, adopt, nurture and grow. I have been immersed in lean thinking since 2005, and a couple of years ago I had a revelation about one of the most basics of lean concepts, Taiichi Ohno’s ‘seven wastes’, and their relation to the innovation process.
I’ve discussed the wastes briefly before in a previous BVEX article (Maximise Value Don’t Just Minimise Cost) and how leaders can look out for them within their processes and seek to remove them, but I’m increasingly aware about how powerful a device the wastes can be.
The Seven Wastes
Transportation – the product or service moving around the organisation
Inventory – the amount of product or service present within a process
Motion – the employee moving around the organisation to enact the process
Waiting – the time spent for the good or service to progress to the next stage
Over-production – making and/or delivering products or services that customers don’t want
Over-processing – doing more than is necessary to create the good or service
Defects – the consequences of doing something wrong within the process
My first understanding of their power came to me when I worked with Nestlé and assisted it in developing and delivering its Lean Learning Programme. I was privileged to work with many different lean experts in order to develop the course and one guy, John Papin, left a lasting impression. He was the first person who made me truly aware of the interconnection of the seven wastes. When we seek to improve a process, we often end up ‘trading’ the wastes in order to bring about a desired change. You often can’t just reduce all of the wastes, you might increase one of them in order to decrease a waste that is less preferable. So, for example, it might be better to increase the amount of inventory that you hold within a warehouse as opposed to waiting for the goods to be produced, which has the knock-on effect of making the customer wait. In this example, you increase the inventory in order to reduce the waiting time.
But what if all of our goods are becoming damaged when waiting in the warehouse (defects)? We might choose to increase the ‘over-processing’ and wrap them carefully in bubble wrap in order to reduce the amount of damages. When you look at the interconnection of wastes in this way, you can very quickly move to a position where you can start to see that step change innovation occurs when you can break free of these trade-offs.
I believe (and know) that big companies push for innovation to overcome these wastes and waste trade-offs. Amazon, for example. If you think about the ‘inventory’ that is associated with loading a truck full of customers’ goods and then the ‘wait’ experienced by a customer in order to deliver those products through multiple stops, you can quickly start to see how the prospect of recruiting drones to deliver single packages within a quick time frame, can start to be appealing. Such step change innovation within its business model obliterates delivery inventory, waiting and potentially other wastes, too. However, even here, the wastes await. Are defects and damages more prevalent within drone delivery, for example?
The Internet of Things (IoT), a term that refers to the transportation of goods around the world using the free access and sharing principles of the internet and its rich data sharing capability, has the potential to reduce costs for suppliers and customers, and decrease unnecessary transportation and waiting time for customers. The IoT also possesses the opportunity to provide a greener, more sustainable option for society, and this is where I think the use of the seven wastes as a mechanism to innovate can really fly.
The wastes are, by their very nature, an unnecessary drain on resources. Understanding these resource drains is the first step in identifying a problem and then inciting innovative action in order to do something about it. Technology is often the key driver needed in order to overcome these wastes and bypass any ‘waste trade-offs’ that exist. Will 3D printing overcome the waste of inventory and transportation by enabling manufacturers, even customers, to create parts and products as close to where they are needed as possible? Will driverless cars overcome the waste of defects (crashes) and make the roads a safer place to be? Whatever the future holds, I’ll bet that we’ll see key innovations bursting through those wastes and bringing benefit to suppliers and customers alike.