Value and Waste

An activity adds value if the customer would willingly pay for it, it transforms the product or service, and it is done right first time. Everything else is either necessary non-value-adding work — inspection required by regulation, for example — or waste.

The eight wastes

Waste	Examples
Transport	Moving material between buildings, double handling
Inventory	Raw material, work in progress and finished goods beyond need
Motion	Walking for tools, reaching, searching for information
Waiting	For approval, materials, a machine, information, a decision
Overproduction	Making more, sooner or faster than required
Over-processing	Tighter tolerance than needed, duplicate approvals, reports nobody reads
Defects	Scrap, rework, correction, warranty
Unused talent	People who can see the problem and are never asked

Overproduction

Overproduction is treated as the worst waste because it generates the others: inventory to store it, transport to move it, defects hidden within it, and the concealment of problems that would otherwise become visible. Making things early feels productive, which is exactly why it persists.

Seeing it

Stand and watch a process for thirty minutes without intervening. Follow one item through from start to finish and record where it waits. Walk the route an operator walks in an hour. These simple observations reveal more than any amount of data analysis, and they are almost never done.