The Eighth Type of Waste

The sev­en clas­si­cal types of waste in Lean Man­age­ment are now often sup­ple­ment­ed by an eighth type: the unused poten­tial or unused cre­ativ­i­ty of employ­ees. Mak­ing use of this human poten­tial for the pur­pose of con­tin­u­ous improve­ment is indeed a fun­da­men­tal prin­ci­ple of Lean Man­age­ment. This eighth type of waste is there­fore under­ly­ing the oth­ers and is hence clear­ly of dif­fer­ent nature. Despite this, and because of this, it is a valu­able addi­tion to the sev­en orig­i­nal types of waste.

The rise of Toy­ota after the Sec­ond World War is inex­tri­ca­bly linked with the name Tai­ichi Ohno. He sig­nif­i­cant­ly influ­enced and fur­ther devel­oped the Toy­ota Pro­duc­tion Sys­tem. What is today known as Lean Man­u­fac­tur­ing and more gen­er­al­ly as Lean Man­age­ment orig­i­nates large­ly from his sem­i­nal work. As a result, Toy­ota suc­ceed­ed in sig­nif­i­cant­ly increas­ing pro­duc­tiv­i­ty and not only catch­ing up with the Amer­i­can com­pe­ti­tion from Detroit, but out­per­form­ing it.

Seven Types of Waste in Lean

A cen­tral ele­ment of the Toy­ota Pro­duc­tion Sys­tem (TPS) is the elim­i­na­tion of all waste. This means the avoid­ance of any activ­i­ty that absorbs resources but cre­ates no val­ue, which bet­ter reflects the Japan­ese term Muda (無駄) than the usu­al trans­la­tion in Eng­lish lit­er­a­ture with waste. Tai­ichi Ohno orig­i­nal­ly dis­tin­guish­es these sev­en types of waste (the first let­ters result in the acronym TIMWOOD as a mnemonic):

In many fac­to­ries, for exam­ple, over­pro­duc­tion of semi-fin­ished and fin­ished prod­ucts was and is com­mon. These buffers can com­pen­sate to a cer­tain extent for qual­i­ty fluc­tu­a­tions dur­ing pro­duc­tion (and in the sup­ply chain) and thus pre­vent effects on qual­i­ty and deliv­ery dates.

The most dan­ger­ous kind of waste is the waste we do not recognize.

Shi­geo Shingo

It is because these buffers are so con­ve­nient and seem­ing­ly indis­pens­able that this type of waste is often not rec­og­nized as such. Nev­er­the­less, the hid­den costs of inven­to­ry, stor­age space and trans­port should not be under­es­ti­mat­ed. Many authors there­fore regard over­pro­duc­tion as the worst type of waste.

These sev­en types of waste are all relat­ed to process­es. They describe symp­toms of weak­ness­es in work pro­ce­dures whose root caus­es must be found and elim­i­nat­ed. This con­tin­u­ous improve­ment (Kaizen) of process­es is there­fore an essen­tial ele­ment of the Toy­ota Pro­duc­tion Sys­tem. Con­trary to the pre­vail­ing view at the time, how­ev­er, con­tin­u­ous improve­ment in lean man­age­ment is not reserved for man­age­ment, but is the task of “ordi­nary” work­ers. A dif­fer­ence that makes a difference.

The Toy­ota style is not to cre­ate results by work­ing hard. It is a sys­tem that says there is no lim­it to people’s cre­ativ­i­ty. Peo­ple don’t go to Toy­ota to ‘work’ they go there to ‘think’.

Tai­ichi Ohno

Unused Human Potential

At the heart of Tai­ichi Ohno’s phi­los­o­phy is the human being as an essen­tial suc­cess fac­tor. The pri­ma­ry man­age­ment task is there­fore empow­er­ing instead of instruct­ing. In his book “The Toy­ota Mind­set, The Ten Com­mand­ments of Tai­ichi Ohno” (Ama­zon Affil­i­ate-Link) Yoshi­hi­to Waka­mat­su, who worked many years direct­ly under Tai­ichi Ohno, reports the fol­low­ing anec­dote illus­trat­ing this prin­ci­ple. Dur­ing a vis­it to a Toy­ota plant, Ohno was accom­pa­nied by anoth­er man­ag­er. This man­ag­er noticed some mis­ap­pli­ca­tion of the Toy­ota pro­duc­tion sys­tem and asked Ohno why he had not cor­rect­ed them imme­di­ate­ly. The answer was:

I am being patient. I can­not use my author­i­ty to force them to do what I want them to do. It would not lead to good qual­i­ty prod­ucts. What we must do is to per­sis­tent­ly seek under­stand­ing from the shop floor work­ers by per­suad­ing them of the true virtues of the Toy­ota Sys­tem. After all, man­u­fac­tur­ing is essen­tial­ly a human devel­op­ment that depends heav­i­ly on how we teach our workers.

Tai­ichi Ohno

In order to elim­i­nate the sev­en types of waste, the cre­ativ­i­ty of all the peo­ple involved in these process­es is need­ed. Empow­er­ing and train­ing these for­mer­ly “sim­ple” work­ers to do this is the cen­tral task of lead­er­ship. In essence, Tai­ichi Ohno was about unleash­ing human poten­tial over employ­ing human resources, as it is now described in the Man­i­festo for Human(e) Lead­er­ship.

In order to empha­size this, unused human poten­tial or unused cre­ativ­i­ty is con­sid­ered the eighth type of waste. Right­ly so, on the one hand, because the untapped poten­tial of employ­ees is huge, as orga­ni­za­tions are still oper­at­ed like machines and peo­ple are treat­ed like lit­tle cog­wheels.

On the oth­er hand, this eighth kind of waste is obvi­ous­ly of dif­fer­ent nature than the clas­si­cal sev­en, because it under­lies them in some way. How­ev­er, the use of cre­ative poten­tial is so cru­cial in Lean Man­age­ment that it makes sense to com­ple­ment the sev­en clas­sic types of waste with this eighth. Besides Toy­ota, the exam­ple of the Upstals­boom clear­ly shows that it is worth­while for every­one when human resources final­ly become human potential.