Muda. That’s a neat word. You can say it with enthusiasm. You can say it with scorn.

It means waste.

There are several disciplines in modern management that have almost been elevated to the level of religions: Total Quality Management, Six Sigma, Earned Value Project Management, PERT/CPM, double-entry bookkeeping, work breakdown structures, business process engineering, Kaizen, quality circles, etc.

But the one I really respect is LEAN. LEAN is a process, some say a whole philosophy or company culture, which tries to maximize value to the customer by minimizing waste. Continuous improvement is key to the process.

The process was popularized by James T. Womack and Daniel T. Jones in their seminal book, Lean Thinking: Banish Waste and Create Wealth in Your Corporation, Revised and Updated.

In this book, the authors summarize “the five inherent steps in any lean system:

• Correctly specify value so you are providing what the customer actually wants
• Identify the value stream for each product family and remove the wasted steps that don’t create value but do create muda (waste)
• Make the remaining value-creating steps flow continuously to drastically shorten throughput times
• Allow the customer to pull value from your rapid-response value streams as needed (rather than pushing products toward the customer on the basis of forecasts)
• Never relax until you reach perfection, which is the delivery of pure value instantaneously with zero muda.”

As always, the first step is to determine what the customers value. Assuming that you know what they value is a common trap.

Lean experts have identified eight different kinds of waste (muda). The first seven types were described by Taiichi Ohno of Toyota (Ohno 1988); the last was later added by MIT researchers (Womack and Jones 1996):

• Defects: consuming resources in an activity that has to be done over, thrown away, or that creates harm to the client or customer
• Overproduction: doing more of something than clients or customers currently need
• Inventory: tying up resources or clients during the time the service is in process
• Unneeded processing: doing things that do not add any value to the client or customer
• Unneeded movement of people
• Unneeded movement of goods
• Waiting
• Poor Design: Designing goods and services that don’t meet the needs of clients or customers.

Lean was originally developed to improve manufacturing processes with a major focus on replacing batch processing with an on-demand system that dramatically reduced work-in-process inventory.

However, Lean is a valuable tool for service businesses and nonprofits also. Here the focus is more on eliminating wait times and defects.

A Real World Example

One of our major airline customers required that they approve any changes to the repair manuals for our avionic products before the repairs could begin.

However, we found that it could take up to a full year for their engineering department to approve even the most minor changes. This meant that they literally had to buy twice as many spare black boxes as necessary to cover for the large inventory of boxes waiting for repairs. This cost them millions.

They were unhappy and, as a result, so were we.

So we offered to assist them in a Lean analysis of their system. They accepted.

We quickly determined that they valued safety and speed of repair.

We spent several days plotting out the approval process and the timing of each step. When we noted that there was an emergency work-around process that only took one day, the cost of wait times at each step became apparent.

We recommended that they use the on-demand work-around process as the normal process and eliminate the large in-basket wait times of the current batch process. The savings were dramatic, with higher quality and lower cost. Approval times were cut from one year to one week.