TUM School of Management

Production and Supply Chain Management

Prof Martin Grunow Technische Universität München

Productivity and Waste

Prof. Holly Ott

Production and Supply Chain
Management Chair: Prof. Martin Grunow
TUM School of Management

Holly Ott 1
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Learning Objectives
• Understand the importance of the elimination of waste
on productivity, problem-solving, and employee
motivation.
• List and give examples of the seven wastes of Lean
Production.
• Transportation
• Inventory
• Motion
• Waiting
• Over-processing
• Overproduction
• Defects
Holly Ott 2
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Selling Iced Lemon Tea

Start Boil Put 2 teabags Fill jug with Let steep

water into jug boiling water 2
minutes

End – Pour Squeeze lemon

Add ice and Chill for 30
ready for into into jug and add
lemon minutes
customers! cups lemon slices
slice

• Inputs: ICED LEMON TEA

Output:
$1.00
•

Holly Ott 3
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Selling Iced Lemon Tea

Start Boil Put 2 teabags Fill jug with Let steep

water into jug boiling water 2
minutes

End – Pour Squeeze lemon

Add ice and Chill for 30
ready for into into jug and add
lemon minutes
customers! cups lemon slices
slice

• Labor Productivity

Holly Ott 4
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Selling Iced Lemon Tea

Start Boil Put 2 teabags Fill jug with Let steep

water into jug boiling water 2
minutes

End – Pour Squeeze lemon

Add ice and Chill for 30
ready for into into jug and add
lemon minutes
customers! cups lemon slices
slice

ICED LEMON TEA

$1.00

Holly Ott 5
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Seven Wastes of Lean

• Transportation
• Inventory
• Motion
• Waiting
• Over-processing
• Overproduction
• Defects

Holly Ott 6
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Transportation
• Unnecessary movement of materials or people within a
process.
• Examples: temporary storage of work-in-progress instead of
moving the WIP to the next step, frequent transport of raw
materials or parts within the factory due to poor layout …
• Can cause production delays, handling damage, time for
transportation is not contributing to output.
• Long transportation impacts communication, resulting in delays
and this can also affect product quality.
• How to reduce transportation?
• Challenge the current layout and try to minimize the
transportation of material from one function to another.

Holly Ott 7
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Inventory
• Raw material, Work-In-Progress (WIP), or Finished Goods (FG)
• WIP stored to reduce time to complete new orders, FG waiting for
packaging, defective product waiting for rework…
• Inventory’s Dark Side:
• Often a symptom of problems in the
process that are hidden behind rising stock
levels.
• Increases operational costs, including
conveyance, storage, risk of obsolescence.
• Increases production lead time
• How to reduce inventory?
• Define necessary inventory levels and minimize by
Holly Ott reducing batch 8
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Motion
• Unnecessary movement of people or machines within a process.
• Examples: movement of people to fetch tools for a changeover
process, movement of machine operators between different
controls of a machine, necessity to stretch or bend over to
complete task…
• How to reduce wasted motion?
• Check: do manual and machine work cycles contain unnecessary
motion elements?
• Check: are the tooling, equipment and parts around work stations
optimized?
• Check: is the layout optimized for varying customer demands?

Holly Ott 9
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Waiting
• People or machines waiting for the completion of a work cycle.
• Examples: Waiting for raw materials to arrive, waiting for a process
to finish, waiting for maintenance…
• How to reduce waiting?
• Check: does the machine need to be monitored? Are there built-in
checks to stop the machine from producing defective products?
• Check: is the production line balanced so that people and
machines have minimal idle time?
• Check: can idle time be filled in other ways? (quality checks,
cleaning, material handling….)

Holly Ott 1
0
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Over-Processing
• Operation or process not required to meet customer demand.
• Examples: Producing to specifications tighter than the customer
requires, unnecessary quality checks, performing operations
not required to produce the final product…
• Over-processing often happens when standards are difficult to
define (polishing, painting, etc.).
• How to reduce over-processing?
• Clear understanding of the customer’s expectations and correct
translation into specifications, which are then followed by design
and production.

Holly Ott 1
1
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Overproduction
• Producing sooner, faster, or in greater quantities than customer
demand.
• Examples: Producing in larger batches to avoid changeovers,
producing more than requested because of potential quality
issues…
• Over-produced items end up as inventory or scrap,
therefore creating other waste.
• Overproduction takes time away from value-added
activities.
• How to reduce overproduction?
• Clear understanding of the customer demand and produce
only
Holly Ott what the customer wants, and when it is needed. 1
2
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Defects:
Why worry about a few defects?

Mix
Heat to Mold Label
Paraffin
Wax and
and Eject and Market
190℉/ package
82℃ Cool
Pigment

• Internal failures: scrap, rework, delay

• External failures: warranty costs, repairs, lost
reputation
Holly Ott 1
3
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Defects
• Producing product that does not meet specifications
• Examples: Re-working products because customer
specifications are not met, delays due to re-adjusting
equipment or process until the product parameter reaches
the target, scrapping defective product…
• Causes of defects: methods, materials,
machines, manpower, environment
• How to reduce defects?
• Improve process capability by analyzing and solving the root
causes of the defects.

Holly Ott 1
4
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Seven Types of Waste

• Transportation
• Inventory
• Motion
• Waiting
• Over-processing
• Overproduction
• Defects ICED LEMON TEA
$1.00

Holly Ott 1
5
 TUM School of Management
Production and Supply Chain Management
Prof Martin Grunow Technische Universität München

Productivity and Waste

Prof. Holly Ott

Production and Supply Chain
Management Chair: Prof. Martin Grunow
TUM School of Management

Holly Ott 1
6