For the sake of needed repetition, let’s return to the Lean Principle:
Thus the underlying principle behind TPS/Lean is the systemic creation of the shortest possible lead time for the continuous flow of materials and information in order to generate the highest quality and lowest cost.
We need to create the shortest possible lead time for the flow within our system, whatever system and flow that may be. And how do we do that? Taiichi Ohno has told us in very simple terms:
“All we are doing is looking at the time line from the moment the customer gives us an order to the point when we collect the cash. And we are reducing that time line by removing the non-value-added waste.”
So now we need to get comfortable with the concept of “non-value-added waste”, or to keep it simple for now, “waste”. Mr. Ohno (or someone) has taken a stab at defining that waste for us in the list of the “seven wastes”. (I’m not going to list them at this time, but feel free to Google “TPS seven wastes” and review them if needed). These are actually well thought out and would apply to many types of systems. But is this list the end of the story? Is this an all-encompassing list? Ohno, himself, says no:
“I don’t know who came up with it but people often talk about ‘the seven types of waste’. This might have started when the book came out, but waste is not limited to seven types. There’s an old expression: ‘He without bad habits has seven,’ meaning even if you think there’s no waste you will find at least seven types. So I came up with overproduction, waiting, etc., but that doesn’t mean there are only seven types. So don’t bother thinking about ‘what type of waste is this?’ Just get on with it.”
So there’s nothing magical about the number seven other than it has symbolism in the Japanese culture (and in many other cultures – seven days in a week anyone?). And there is nothing magical about the seven wastes he identified – “just get on with it”.
But Mr. Ohno did give us further insight into his definition of waste in his book Toyota Production System (pg. 19):
If we regard only work that is needed as real work and define the rest as waste, the following equation holds true whether considering individual workers or the entire line:
Present capacity = work + waste
So if we take all the resources allocated to a given system (present capacity), these resources will generate a combination of work (needed, value-added) and waste (non-value-added). And if we remove some of the waste from the system, we will be able to 1) generate more work with the given capacity, or 2) reduce the capacity while achieving the same amount of work. We will reduce costs. And since quality defects are considered a waste, if we reduce waste we should be able to increase quality. And if we reduce waste that also consumes Time (almost all waste), the time line (lead time) will be shortened. We are now back to the underlying Lean Principle!
I would now like to take this line of thought to a little deeper level and see if we can understand this thing called “waste” even more comprehensively. The equation that Mr. Ohno gave us for “Present Capacity” is, in fact, the first law of thermodynamics – the law of conservation of energy. This is really not surprising since Ohno and his compatriots were engineers, and all engineers get a thorough dose of thermodynamics as part of their education.
The first law of thermodynamics in its simplest form states:
E = Q + W
Where E is the total internal energy applied to the system (present installed capacity), W is work energy transferred to or from the system (the sign in front of W will be + or – respectively) and Q is the heat energy transferred to or from the system. On an atomic level, thermodynamic work is defined as the transfer of energy that makes use of the uniform motion of atoms while thermodynamic heat is defined as the transfer of energy that makes use of the random motion of atoms. Work is focused, directional energy and heat is non-focused random energy.
Thermodynamics was developed during the invention of the Carnot heat engine in the mid 1800’s and work was the movement of the engine piston and the heat energy released at lower temperatures was generally referred to as “waste heat” (energy not used for work). And I don’t believe it is too far-fetched to believe the Toyota engineers were well acquainted with heat engines and the corresponding thermodynamics. So, based on thermodynamic principles, work is useful energy (value-added) and heat is wasteful energy, i.e., waste (non-value-added).
So the inventors of TPS were looking at their automobile production system in terms of energy required to run the system and whether this energy was consumed as work (useful, needed) or simply wasted. And this total energy consisted of all the resources consumed by the system including labor, brain power, materials, fuel, electricity, spare parts, office supplies, paper work, vacation pay, etc., etc., etc. And they used the first law of thermodynamics to illustrate that all of this energy consumption is either effective (work) or ineffective (waste). Their job was to find ways to conserve energy.
So “why waste energy?” if you don’t have to. The Goal is to find wasted energy and eliminate it to reduce cost, improve quality and shorten lead times!
By the way, heat can be converted to work (hot, expanding gas used to move a piston) and work can be converted to heat (that same piston compressing a gas and heating it). Thus the first law is often referred to as the “law of conservation of energy”. Work and heat can be interchanged within a system but the total energy consumed remains constant (conserved). But let’s not get ahead of ourselves.
My next post will explore this concept in a lot more depth – and I will (gulp) use more thermodynamics to do that.