The 8 Wastes of a Service-Oriented Business

The 8 Wastes of a Service-Oriented Business are those things that add time and cost without adding value. There are many ways waste can occur within a system, but they all fall somewhere within the 8 Wastes. We can use the acronym DOWNTIME to briefly define the 8 categories.

Defects: While we understand a defect in terms of manufacturing, we need to understand the term more broadly in the service industry. A defect in this sense is a ‘mistake’. Poor documentation, misunderstanding customer needs, poor communication or a flaw in a process.

Overproduction: This can occur in any situation where there’s a bottleneck of productivity. If beginning steps of a process are being completed rapidly but there is a slowdown in the next process step, it may be time to reevaluate the way the workload is being distributed.

Waiting: When work stops for reasons such as needing approval, not having adequate materials, or a technical issue like failed equipment or a power outage. Can also be the result of underproduction, when earlier steps of a process are taking too long causing idleness for those who can’t continue with their own workload.

Non-utilization of Talent:  When companies fail to recognize or utilize people’s talents, skills or special knowledge, not only are they missing the benefit of these resources, the underutilized are likely to become dissatisfied and may begin to perform poorly, or leave. This waste of talent happens when management is not responsive, does not assign tasks appropriately or does not train properly.

Transporting: Everything that needs to travel from one place to another. In terms of communication, determining the most expedient way for information to travel is key. Evaluating ease of function and the flow between working environments.

Inventory: A surplus of materials has waste associated with the money spent, the time involved in handling, and space/storage requirements. In the service industry this can also include over staffing due to unrealistic customer demand projections.

Motion: Any excess or unnecessary movement. Poor workstation design or layout as well as processes that require doubling back rather than streamlined and efficient flow.

Excess Processing: Typically due to multiple version of the same task, excessive reporting, duplicated data entry. Equipment that exceeds need can also fall into this category.

A trained Lean Six Sigma professional is able to focus on the main issues of a business that become evident through evaluating trouble spots within each of the 8 Waste categories. Once identified, solutions can be developed to continuously work toward more efficient and successful practices.