Value added process 7 Wastes

Waiting
Movement

Transport

Inventory

Defects

Overproduction

Over-Processing

Value added process:

is an activity that transforms or shapes raw materials or
information to meet customers needs. => what the customer will pay for
Anything that does not add value is waste and must be reduced or eliminated.
The competitiveness of a company depends on ability to create value in the process.

1 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

Overproduction
Definition

Overproduction is to manufacture an item before it

is actually required, too much or "Just in Case".
It is the most dangerous waste of the company,
because it hides the production problems.
Overproduction must be stored and managed.

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Causes

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No consideration of customer tact-time

Large batch processing
High customer demand fluctuations
Long production set-up / change-over times
Production planning for individual production
steps (Push vs. Pull)
Un-leveled scheduling
Unbalanced workload and process times
Just in case production to prevent shortages
due to machine downtimes
Producing parts to keep machines & people
busy

Wasted floor space by inventories

Difficulties to detect defects
Excessive inventory and high inventory levels

2 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

Examples

Inventory
Definition

Inventory in form of Raw Materials, Work-InProgress (WIP) or Finished Goods, represent a

capital expense. Any of these three items not
actively processed to add value is waste.

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Production set-up times

Demand insecurities
Long throughput times
Quality defects (internal)
Quality defects (external by supplier)
Logistics set-up
Product transfers
Inter company clearance
Product launches
Engineering changes

Causes

3 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

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Inventories before and in-between process

stages
Buffers against downtimes and unexpected
problems
SAP parameters not optimized
Wasted floor space by inventories

Examples

Transportation
Definition

Since transportation does not make any

transformation to the product that the consumer is
not willing to pay for it. Each time a product is
moved the risk of being damaged, lost, delayed, etc.
as well as being a cost for no added value occurs.

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No flow oriented plant / line layout

Moving parts in and out of storage

Material transfer from one workstation to

Causes

another

No U-shaped cells

External warehouses

4 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

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Examples

Long traveling distances cause:

Increased input of resources
Inefficient space utilization (traffic aisles)
Increased space requirement for buffers due to
long lead times
Transportation damages
Losses
Dead assets

Movements (motion)
Definition

Compared to the waste in form of 'Transportation',

'Motion' refers to the worker or equipment.
Having everything to hand as it is needed reduces
motion. This waste is related to ergonomics.

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Unfavorable facility or cell layout

Poor workplace organization

Machines / parts not in close range

Causes

5 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

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Walking for replenishment or next operation

Examples

step

Lifting boxes

Putting down boxes

Reaching for tools

Searching for right part/box

Waiting
Definition

Waiting or queuing is waste since it does not add

value to the product.
Whenever goods are not moving or being
processed, the waste of waiting occurs.

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Bottleneck processes

Long set-up / change-over times

Unbalanced workflow and workload

Operator waiting time

Unplanned maintenance

Waiting for parts

Upstream quality problems

Waiting for machine capacity / availability

Distances between work centers are too long

Wasted floor space by inventories

and operations not linked

Waiting for instructions/signals to continue with

Causes

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Inventories waiting to be processed before and

in-between process stages

production

6 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

Examples

Over-Processing
Definition

Using a more expensive or more valuable resource

than is needed for the task / the value adding
activity, but which is not needed by the customer.

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Over-tight tolerance

Causes

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Usage of expensive high precision equipment

Examples

where simpler tools would be sufficient

7 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

Multiple cleaning of parts

Inappropriate tool or part design

Wrong packaging (excessive packaging)

Defects
Definition

These are products or services that do not conform

to the specification or Customers expectation, thus
causing Customer dissatisfaction.

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weak process control

High manufacturing cost:

inadequate training or work instructions

obsolete inventory

re-inspecting and rework

rescheduling

capacity losses

Causes

8 | CEP PS - CEP LA SCM S&I | Continental Automotive GmbH

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Examples