Value/Waste in Logistics (I)
Lean Concept gives the opportunity to the company to increase the service level, while reducing the cost. This is possible through strict implementation of lean tools
Posted: Aug 2012
Waste is any human activity which absorbs resources but creates no VALUE. It may be logical that nobody should consciously do something that creates no result, but such situation is happening everywhere.
This could be caused by different reason. Sometimes the waste appear because lack of management of the process. Also, it can appear in case that one process becomes obsolete and inefficient because of lack of change management.
Value can easily turn to waste in case of lack of management. Therefore, value and waste need to be clearly defined and distinguished.
Value = Those activities, what customer must be willing to pay for
Waste = as any activity that consumes resource but adds no value as specified by the customer
Value enabling = Processes that don’t add value but must be done in the short term to accomplish value-added work in the current system.
The ratio between value, waste and value enabling activities in processes is varying, but in case of lack of lean management it can easily turn to this.
Every branch of the business can define the wastes that they produce. Typical wastes within the logistic processes are:
Loss of intellect - Not fully utilizing the talent of all employees
Over Service - Loading, picking, handling too much, too fast or too nice..etc
Handling (by forklifts/trucks) - Movements between processes
Excessive Inventory - Everything that is in excess of the minimum required to perform the tasks
Waiting time / Unbalanced processes - Waiting for pallets/cases/ docs, until someone else has completes his cycle
Over processing - More steps in the processes than required
Rework - Repairing bad quality or mistakes
Excessive Motion - Every motion that is not adding value