April 2013 | Commentary | The Lean Supply Chain

Are Your Processes Adding Value or Waste?

Tags: Lean

Paul A. Myerson is Professor of Practice in Supply Chain Management at Lehigh University and author of books on Lean for McGraw-Hill, and supply chain for Pearson, 610-758-1576

Packaging helps protect and preserve products, but these days companies tend to over-package and over-protect. Excess packaging illustrates the waste known in Lean methodology as overprocessing. Added processing that doesn't bring value to goods or services in the customer's eyes creates unnecessary waste.

When trying to eliminate overprocessing waste, start by focusing on standardized work. The first step is creating standard operating procedures (SOPs). With today's technology, it is easy to create SOPs that include digital photographs of important steps in a process, as well as simple written instructions—often in more than one language. These SOPs should be easy to understand and follow, and kept in a visible place in the appropriate work area.

Developing SOPs can be incorporated into a Workplace Organization Kaizen event or part of the Standardize step (the fourth S in the 5S process). They reduce variability to improve quality and minimize unnecessary overprocessing.

The logistics and transportation sector presents many opportunities to reduce overprocessing. A good example is the value-added services typically performed by third-party logistics providers. These activities include assembly or kitting processes as part of a postponement strategy.

These value-added processes are often one-off events where little effort is put into developing SOPs and minimizing overprocessing. If we spend a little more time focusing on reducing non-value-added activities such as overprocessing, we can both reduce costs and improve quality.

Sharing Responsibility

In warehouses, overprocessing often appears in the form of overchecking. Using the Lean concept of Quality at the Source—which means quality is everyone's responsibility—workers can catch or correct issues earlier in the process, rather than at final inspection. As a result, they will significantly reduce this waste and improve quality.

Accomplishing this goal involves a concept known as Mistake Proofing to catch or prevent quality issues early in the process—even at the supplier. One useful tool in this regard is a Poka Yoke, which means to "fail safe."

This mechanism helps operators avoid mistakes and eliminate product defects by preventing, correcting, or drawing attention to human errors as they occur.

Putting more thought into preventing overprocessing during product development can help avoid waste from the start. The concept of Value Engineering involves improving design and specifications during the research, design, and production stages of product development.

Another important practice that can reduce overprocessing is Concurrent Engineering, which employs cross-functional teams during the product development process.

For example, involving supply chain and logistics personnel early on can help avoid types of overprocessing that add unnecessary cost to shipping and handling due to extra weight or cube.

We can avoid much of the overprocessing found in our supply chain and logistics processes if we focus on it in the first stages—and the earlier in the process, the better.

Parts of this column are adapted from Lean Supply Chain & Logistics Management (McGraw-Hill; 2012) by Paul A. Myerson with permission from McGraw-Hill.