Muda (無駄) is a traditional Japanese term for an activity that is wasteful and doesn't add value or is unproductive, etymologically none (無)+ trivia or un-useful (駄) in practice or others. It is also a key concept in the Toyota Production System (TPS) and is one of the three types of waste (Muda, Mura, Muri) that it identifies. Waste reduction is an effective way to increase profitability. Toyota merely picked up these three words beginning with the prefix mu-, . which in Japan are widely recognized as a reference to a product improvement program or campaign.
A process adds value by producing goods or providing a service that a customer will pay for. A process consumes resources and waste occurs when more resources are consumed than are necessary to produce the goods or provide the service that the customer actually wants. The attitudes and tools of the TPS heighten awareness and give whole new perspectives on identifying waste and therefore the unexploited opportunities associated with reducing waste.
Muda has been given much greater attention as waste than the other two which means that whilst many Lean practitioners have learned to see muda they fail to see in the same prominence the wastes of mura (unevenness) and muri (overburden). Thus whilst they are focused on getting their process under control they do not give enough time to process improvement by redesign.
One of the key steps in Lean and TPS is the identification of which steps add value and which do not. By classifying all the process activities into these two categories it is then possible to start actions for improving the former and eliminating the latter. Some of these definitions may seem rather 'idealist' but this tough definition is seen as important to the effectiveness of this key step. Once value-adding work has been separated from waste then waste can be subdivided into 'needs to be done but non-value adding' waste and pure waste. The clear identification of 'non-value adding work', as distinct from waste or work, is critical to identifying the assumptions and beliefs behind the current work process and to challenging them in due course.
The expression "Learning to see" comes from an ever developing ability to see waste where it was not perceived before. Many have sought to develop this ability by 'trips to Japan' to visit Toyota to see the difference between their operation and one that has been under continuous improvement for thirty years under the TPS. Shigeo Shingo, a co-developer of TPS, observed that it's only the last turn of a bolt that tightens it - the rest is just movement. This level of refined 'seeing' of waste has enabled him to cut car body die changeover time to less than 3% of its duration in the 1950s as of 2010. Note that this period has allowed all the supporting services to adapt to this new capability and for the changeover time to undergo multiple improvements. These multiple improvements were in new technologies, refining value required by 'downstream' processes and by internal process redesigns.
Overproduction happens each time you engage more resources than needed to deliver to your customer. For instance, large batch production, because of long change over time, exceeds the strict quantity ordered by the customer. For productivity improvement, operators are required to produce more than the customer needs. Extra parts will be stored and not sold. Overproduction is the worst muda because it hides or generates all others, especially inventory. Overproduction increases the amount of space needed for storing raw material as well as finished goods. It also requires a preservation system.
Each time a product is moved it stands the risk of being damaged, lost, delayed, etc. as well as being a cost for no added value. Transportation does not make any transformation to the product that the consumer is supposed to pay for.
Inventory, be it in the form of raw materials, work-in-progress (WIP), or finished goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Any of these three items not being actively processed to add value is waste.
As compared to Transportation, Motion refers to the producer, worker or equipment. This has significance to damage, wear and safety. It also includes the fixed assets and expenses incurred in the production process.
Whenever defects occur, extra costs are incurred reworking the part, rescheduling production, etc.
Over-processing occurs any time more work is done on a piece than what is required by the customer. This also includes using tools that are more precise, complex, or expensive than absolutely required.
Whenever goods are not in transport or being processed, they are waiting. In traditional processes, a large part of an individual product's life is spent waiting to be worked on.
An easy way to remember the 7 wastes is TIMWOOD.
T: Transporation I: Inventory M: Motion W: Wait O: Over-processing O: Over-production D: Defect
Other sources have proposed additional wastes. These may work for the proposers or they may overlap or be inconsistent with the originals which came from a coherent source.
Organizations employ their staff for specific skills that they may have. These employees have other skills too, it is wasteful to not take advantage of these skills as well. "It is only by capitalizing on employees' creativity that organizations can eliminate the other seven wastes and continuously improve their performance."
Shigeo Shingo divides process related activity into Process and Operation. He distinguishes "Process", the course of material that is transformed into product, from "Operation" which are the actions performed on the material by workers and machines. This distinction is not generally recognized because most people would view the "Operations" performed on the raw materials of a product by workers and machines as the "Process" by which those raw materials are transformed into the final product. He makes this distinction because value is added to the product by the process but not by most of the operations. He states that whereas many see Process and Operations in parallel he sees them at right angles (orthogonal) (see Value_Stream_Mapping). This starkly throws most of operations into the waste category.
Many of the TPS/Lean techniques work in a similar way. By planning to reduce manpower, or reduce change-over times, or reduce campaign lengths, or reduce lot sizes the question of waste comes immediately into focus upon those elements that prevent the plan being implemented. Often it is in the operations area rather than the process area that muda can be eliminated and remove the blockage to the plan. Tools of many types and methodologies can then be employed on these wastes to reduce or eliminate them.
The plan is therefore to build a fast, flexible process where the immediate impact is to reduce waste and therefore costs. By ratcheting the process towards this aim with focused muda reduction to achieve each step, the improvements are 'locked in' and become required for the process to function. Without this intent to build a fast, flexible process there is a significant danger that any improvements achieved will not be sustained because they are just desirable and can slip back towards old behaviours without the process stopping.