What Is Muda?
Waste (muda) is the enemy of Lean Manufacturing, but how do we define waste, and how do we recognize it?
By Norman Bodek
Dan Bills, former CEO of Granville Phillips (Boulder, CO), once observed, "If I was in Grand Central Station in New York City looking for a person I had never met before, how in the world would I be able to find her? There are tens of thousands of people going through Grand Central every day. How would I identify the person I am looking for?"
This insight came to him after learning about Muda from Shigeo Shingo. Muda is waste. Think of Dan Bills' point: how can we identify and eliminate waste in the manufacturing process if we don't know what waste is? And for the last 100 years, we in manufacturing either didn't know what waste was, or we ignored it. Our concerns were centered on faster machines, better utilization of those machines, and new technology, while Toyota realized that there was a much better way to get an advantage over General Motors, Ford, and Chrysler than to spend lots of money.
There are a number of wastes to consider; each should be relentlessly discovered and eliminated. Fundamentally, a waste is something that does not add value to the product. It is something that the customer should not have to pay for. Let's look at the prime wastes in manufacturing:
Inventory is waste. At one time we thought that inventory was very valuable. In fact, the more work-in-process or finished goods inventory we had, the more profit we made. At the end of the quarter, especially before the end of the year, we would work, sweat, as hard as we could, to produce as much inventory as possible. Ironically, Wall Street and our accounting system told us that inventory was a great asset. We didn't even care if we sold the product, for we gathered our profits as soon as we worked on the raw materials.
Taiichi Ohno, vice president of Toyota Motor Company and co-creator of the Toyota Production System, would always start his lectures with the visual example of a river covering a number of rocks. He said: "Inventory is like a river that flows throughout the factory. It covers all of the manufacturing problems. If you have a quality problem, just discard the bad product and get a good one from inventory. If you have a machine breakdown there's no problem, because the next operation has plenty of inventory to draw from."
It occurred to him and Shigeo Shingo, the other co-creator of the Toyota Production System, that the manufacturing problems hidden by inventory were draining away the company's real profits. "Financial success will come from the elimination of those wastes, and not from manipulating the financial statements," he observed. And above all, the company's valuable asset, cash, would increase as inventory declined.
Ohno said that if we lower the river of inventory then the rocks, manufacturing problems, will be revealed, and we can attack those problems, one-by-one, get to the root causes of the problems and permanently eliminate them. To achieve this objective, he asked Shingo, probably one of the greatest manufacturing geniuses of the 20th century, to reduce setup time on a punch press used to make auto parts from four hours to two hours. "If we can shorten the changeover time, we can reduce our inventory."
Shingo listened to Ohno and responded: "Okay." Then Shingo sat, studied, and watched a changeover taking place. While he was watching the worker doing the changeover, Ohno came back and said: "Shingo, two hours is no good; we must reduce the changeovers to less then 10 minutes." And Shingo, unperturbed, just said: "Okay."
That magic moment gave birth to what we call the Toyota Production System, JIT (Just-in-Time), or Lean manufacturing. Through his studies, Shingo developed a system called the SMED system (Single Minute Exchange of Die), and was able to reduce almost every single setup at Toyota to less than 10 min. Toyota's inventory dropped more than 90%. While GM had a fourtimes-per-year inventory turn, Nippondenso, a Toyota subsidiary that makes air conditioners, had an inventory turnover rate of 350—it maintained less than one day's inventory in the plant. Thus, if you ordered a new GM car it took GM over twelve weeks to deliver it to you, while Toyota could deliver a new car in Japan in just seven days.
Defects and quality problems are waste. One day I was standing in a GM plant near a large pile of car doors, watching a quality manager inspect one of the doors. He was measuring tolerances. I asked him: "What if the door is out of tolerance? What would you do next?" He answered: "I would inform the punch press operator to tighten the tolerances." "But," I pointed out, "you have hundreds of doors sitting on the floor in front of you. What would you do with those?" He responded, "Oh, don't worry. People on the line installing the doors have very good rubber mallets."
Well, Toyota decided that defects must be eliminated, and once again got Shingo "on the job." Shingo studied all of the great quality masters, and noticed that quality statistics was a prime tool to reduce defects. But it occurred to him that while measuring defects might point to a defect problem, it didn't eliminate that problem.
At the time, Quality Control Circles, developed by Kaoru Ishikawa, took knowledge from the quality managers and passed it on to all of the workers in the plant, teaching them basic quality tools. Instead of just quality managers attempting to solve defect problems, that task was now in the hands of all the workers. Quality Control Circles were able to reduce defect rates substantially, but the tools learned only identified the quality problems, they did not get rid of them. Shingo wanted to achieve Zero Defects not just reduce the defect rate.
He then dreamt up a brilliant concept called Poka-Yoke. Up to that moment, managers and engineers were developing fool-proofing devices that were very good and reduced defects, but did not eliminate them. Shingo, like Ishikawa, enlisted every single worker in the process of identifying defects, and developing simple but effective devices (Poka-Yoke) to eliminate those defects.
I recently met with a small group of managers in a company near where I live. I particularly liked one of their products. It was designed beautifully, but occasionally defects were created. An operator whose job was to insert two small pipes into this product, and then bend them, would once in a while depress the bending machine's foot pedal too soon, causing a defect. I asked the group what we could do to get Zero Defects. One person in the group said: "We could go out and buy a new machine for $90,000, and that would get us zero defects." I countered by saying that "Ohno and Shingo told me that they don't spend much money on improvements.What else could we do?"
It took us maybe another fifteen or twenty minutes to brainstorm, looking for Poka-Yoke devices to address this problem. We came up with a simple sensor to, first, detect that the operator had indeed put two pieces of pipe together, and another sensor to detect that the part and the pipes were properly set in the bending machine before it allowed the operator to press the foot pedal. She couldn't make a mistake, and instead of spending $90,000, we thought this device might cost close to $100.
Over-processing is waste. Once again, our geniuses Ohno and Shingo developed one-piece-flow production, where instead of one machine producing as many products as possible and then moving large lots of inventory to the next operation, only one part would move at a time. To achieve this flow, they moved machines into cells. One part was machined, and then moved to the next machine. Of course, quality defects had to be virtually eliminated, and machine problems had to disappear, for this approach to work.
Wrong processing is waste. In America we were accustomed to spending money on new machines. Toyota operated like the Scotland of Japan. The last thing they did was spend money on new equipment. When I owned Productivity Inc., we conducted 50 study missions to Japan. During these missions, around 20 American managers would accompany me. On most visits, I would take the group to Toyota and to Toyota subsidiaries. During one of the visits I said to Ohno, "I do appreciate the opportunity to visit Toyota plants but, Mr. Ohno, we are always looking at an old plant with old machines." Ohno laughed and said, "Bodek, you don't understand the Toyota Production System. We don't spend money on new machines." In fact, Toyota would make many of their own machines, and only make exactly what was needed. In America we often would spend a lot of money on machines with lots of features just-in-case we might need those features in the future. Toyota estimated that they reduced machine cost some 90% by building their own machines.
Transportation is waste. Back in the late 1980s, Mercury Marine determined that when they manufactured an outboard motor shaft, the workpiece would move over 29 miles (46.7 km) before completion. Learning about JIT, setting up manufacturing cells, they reduced the distance to 100 yards (91 m). Sure, we need to move things, but moving things does not add value to the product, and the customer is really paying for value.
Motion is waste. Industrial engineering (IE) is a wonderful science to improve the motion of people. An industrial engineer is trained to organize people at work, to make their work most efficient, to utilize people's skills and talents in the best possible way. But there are often not enough industrial engineers within companies to make any significant impact. I was working with one company this past year that employed 1800 people, among them around three industrial engineers.
Years back, I worked with Shigehiro Nakamura, a great Japanese author, consultant, and teacher. He would always walk a plant carrying a video camera. We would stop at an operation, and he would take a short video of the operator and the process. Then, afterwards, he would gather a small group in a meeting room, and project the video onto a screen. He would ask: "How can we improve the motion of the operator?" We then would brainstorm together.
Setup time and machine downtime are wastes and should be eliminated. I remember visiting a washing machine plant in Japan operated by Panasonic, where there was no separate maintenance department. The company taught operators in the plant to fix their own machines. And since Shingo's great breakthroughs on setup reduction, changeovers are often done in seconds, not in hours.
Waiting time is waste. I have visited more than 250 manufacturing plants in Japan, and I don't remember seeing a person standing, watching a machine and waiting for the process to end, in any of them. I have been to numerous plants in America, and I always see people waiting and watching machines. Just last year I visited a plant in the South and saw many workers standing and waiting, and saw one worker just sitting, for he didn't know what else to do. Managers would walk by as if the worker didn't really exist. I like Toyota's idea of making sure that people are always moving, and that it may be alright for machines to wait. With JIT, we want to produce only what our customers have ordered, and it doesn't matter that much if machines sit and wait.
And the biggest waste of all is the underutilization of people's talents. If you just learn to ask people for their ideas and get them to participate in creative problem-solving activities, you will be amazed at what people can do. I visited a Gulfstream plant in Mexico last June, and taught them Quick and Easy Kaizen. Prior to my visit they had a year's goal of getting 800 implemented ideas from their employees. In the last six months of the year they received over 5000. Imagine how the average worker feels now that his/hers ideas are listened to, and that they have the power to implement their own ideas. And imagine the millions of dollars the company has saved by implementing those ideas. When you learn how to obtain these ideas from workers, you will kick yourself that you didn't do it before.
Frederick Taylor, the father of scientific management, de-skilled work, having workers act as extensions of machines, doing the same function over and over again. He said, "Management does the planning and the thinking, and the worker does the work." His methodology was very powerful and brought great wealth to American Industry, but also created boring, repetitive, unfulfilling work. Workers were treated like drones, and acted as if they had no brains at all to use.
Along came Toyota and other Japanese companies, and realized that to produce high-quality products at the lowest possible cost, they had to enlist the creative talent of every single worker. In truth, it's the worker doing the job in their own 24 ft2 (2.2 m2) of space who is the expert on the job. The worker knows the work, but is rarely ever asked to solve those problems that affect his/her work everyday. This enormous waste is eliminated as Quick and Easy Kaizen takes hold.
General Motors was the largest manufacturing company in the world and had a corner on the world's car market, and now they are fighting for their survival. They looked at false profits instead of developing their people, the true assets of a company, and eliminating wastes in the manufacturing process. Toyota has not laid off a single worker since around 1948, and last year GM announced the layoff of more than 50,000. While GM was losing $10.6 billion, Toyota was on the track to earn over $11 billion this year. Toyota's salary costs in Japan are actually higher than GM's in Detroit, and Toyota now has nine manufacturing plants in North America. What is Toyota doing differently than GM? I believe that fundamentally Toyota has done only two things differently from General Motors these past years: develop people to their fullest, and relentlessly attack and eliminate non-value-adding wastes."
Norman Bodek is the president of PCS Inc. (Vancouver, WA), a publishing and consulting company. In 1979, he started Productivity Inc. Press (New York), and published hundreds of management books on productivity, quality, and Lean manufacturing. At Productivity, he also developed and published numerous management training programs, developed training videos, ran major national conferences on productivity and quality, conducted more than 200 seminars and workshops a year, led 50 study missions to Japan, and published five monthly newsletters. As a result of his 60 trips to Japan, he was able to meet Taiichi Ohno and Shigeo Shingo, co-creators of the Toyota Production System (Lean manufacturing), and many other masters in manufacturing improvement, and subsequently published their works. He also reprinted and republished Henry Ford's book Today and Tomorrow, which was originally published in 1926. He introduced to the West important Lean tools and techniques discovered in Japan: JIT, Jidoka, 5S, Value Stream Mapping, SMED, QFD, CEDAC, Hoshin Kanri, Andon, Kanban, and Poka-Yoke.
He works as a consultant teaching Quick and Easy Kaizen, and attaining zero defects, and has recently become an author, co-authoring with Bill Waddell, Rebirth of American Industry—A Study of Lean Manufacturing, co-authoring with Chuck Yorke All You Gotta Do Is Ask, and co-authoring with Bunji Tozawa The Idea Generator—Quick and Easy Kaizen.
Norman Bodek's most recent book is Kaikaku The Power and Magic of Lean, winner of the Shingo Prize. Kaikaku is a Japanese word meaning a great transformation in awareness and actual business. For more information on this book, or to place an order, contact SME Customer Service at (800) 733-4763, 8 am-5 pm, Eastern Time, or go to the SME Web site at www.sme.org, click on SME Store, and follow the prompts. You can visit Norman Bodek's blog at kaikaku.typepad.com.
This article was first published in the July 2006 edition of Manufacturing Engineering magazine.