7 losses

In fact, they are activities that really create value for customers, only a small part of the overall work process. Everything else can be classified into one of 7 losses.

In the original, this is a seven-loss method, we added an eighth, untapped human potential.

The types of 7 losses are:

1. EQUIPMENT / DEFECTS
2. EXCESSIVE PRODUCTION
3. UNNECESSARY MOVEMENT
4. TRANSPORT
5. WAITING
6. INVENTORIES
7. EXCESSIVE PROCESSING (PROCESSING)
8. UNUSED HUMAN POTENTIAL

That is why we help companies reduce wasteful activities of so-called “7 losses”. This makes it easier for company employees to identify important opportunities to improve their productivity.

Not all losses can be removed from the workflow. Some of them are necessary. For example, software testing is not an activity your customers are willing to pay for. Without this, however, you can deliver a low-quality product that will harm your performance and profitability.

Therefore, there are two main types of losses:

Necessary losses – losses without added value, but necessary for quality work performed. Such activities may include testing, planning, reporting, etc.

Net losses – losses without added value. Anything that does not bring value and can be immediately removed from the work process.

The following describes in more detail the losses and their effects on efficiency and productivity in companies

Mistakes in the organization end up costing money. Any processing or scrap represents a significant cost to the company. Each of these costs includes blocked inventory, re-inspection, loss of productivity, and reallocation.

Benefits of eliminating EJECT / FAILURE losses (7 losses)

• Lower space consumption
• Lower consumption of materials, energy, time, labor (economic impact)
• Less machine load
• Longer machine life
• Subsequent scheduled maintenance
• Lower material removal costs (processing)
• A better image of the company
• Better productivity
• Less finishing and repairs

By involving employees and continuous improvement following the example of lean manufacturing, there is the potential for your company to significantly reduce errors and breakdowns.

Improving work and control processes will, if properly implemented, increase product quality and result in less waste due to errors.

Specific causes of failure are:

• Poor quality control at the level of production
• Poor machine repair
• Lack of proper documentation
• Lack of process standards
• Not understanding the needs of your customers
• Inaccurate spare parts stocks

Mistakes in the organization end up costing money. Any processing or scrap represents a significant cost to the company. Each of these costs includes blocked inventory, re-inspection, loss of productivity, and reallocation.

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As the name suggests, overproduction occurs when you produce too many products. This often happens when you make a product before it is actually needed. Overproduction is extremely costly for a manufacturing company, as it disrupts the flow of materials and can degrade product quality and overall productivity.

A Just-in-Time (JIT) manufacturing strategy has been developed to address this type of loss, as products are only made when needed. The overproduction model is also called “just in case” and creates too long times, high storage costs and makes it difficult to detect losses.

Benefits of eliminating losses EXCESSIVE PRODUCTION (7 losses)

• Smaller stocks
• Less input material
• Faster product delivery
• More satisfied customers
• Better standardization of procedures
• Smaller warehouse
• Less internal transport
• Stable production plan

Common causes of overproduction are:

• An unreliable process
• Unstable production plan
• Inaccurate forecasts and demand information
• The needs of the clients are not clear
• Poor automation
• Long or delayed setup time

Overproduction is extremely costly for a manufacturing company, as it disrupts the flow of materials and can degrade product quality and overall productivity.

This type of loss refers to the excessive movement of production workers when walking, not ergonomically bending and stretching to reach the tools and material needed. Although these shifts cause additional production delays, they can pose health and safety issues for employees.

In the context of lean manufacturing and logistics, every step of the work process is analyzed and efforts are made to reduce the amount of movement needed by employees to produce products in time and the required quality.

Benefits of eliminating loss UNNECESSARY MOVEMENT (7 losses)

• Lower workload of operators
• Arranged workplace
• Better standard procedures
• Shorter cycle time
• Less chance of injury

Common examples of movement losses are:

• Poor job placement
• Poorly planned production – floor plan
• Poor process design – flow
• Sharing machines and tools
• Lack of production standards

Excessive movement of production employees when walking does not ergonomically bend and stretch to reach the tools and material needed.

Transporting products does not directly bring value to the product, and excessive movement and handling can cause damage to the product. This can lead to a deterioration in product quality. Excessive transport can occur when manufacturing steps do not run well and require additional transport of material from one part of production to another.

Reducing transport losses involves properly setting up production departments using lean logistics planning and changing it so that all processes are well coordinated and materials travel between departments smoothly – lean flow.

Benefits of eliminating loss TRANSPORT (7 losses)

• Fewer chances of injuries and accidents
• Reduced load on means and transport routes
• Better transparency of the location of products (semi-finished products, materials)
• Cost reduction
• Faster flow of material and information

Common types of transport losses are:

• Poor layout – long distance between processes
• Extensive material handling systems
• Big series
• More storage space in different locations
• Poorly designed production floor plan

Transporting products does not bring direct value to the product, and excessive movement and handling can cause damage to the product

This type of loss refers to the fact that the product or material WIP (work in process) is not moved or processed. In series production, a large part of the product life cycle is consumed in the queue. This usually happens when the material flow is poor, the production cycle time is too long and the distances between work processes are too large.

In lean manufacturing, we understand every lost hour in the process as a bottleneck. One lost hour in production cannot be recovered without causing additional (other) losses. To reduce these types of losses, it is useful to link processes together so that one operation is passed directly to the next with minimal waiting.

Benefits of eliminating loss WAITING (7 losses)

• Higher machine efficiency
• Higher productivity
• Senior OEE
• Lower labor costs

Common causes of waiting are:

• Unplanned downtime / breakdowns
• Long or delayed setup time
• Poor process communication
• Lack of process control
• Idle equipment

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Work in progress (WIP) products are the result of overproduction and waiting, and excess inventory hides production problems. Warehousing of products is one of the biggest costs for manufacturing companies. In addition, excess inventory can prolong delivery times, consume productive space, and make it harder to detect losses in the process.

When you achieve a smooth workflow between workflows and departments with the right use of lean manufacturing and logistics methods, you will be able to use JIT’s production strategies and reduce inventory and related costs.

Benefits of eliminating the loss of INVENTORIES (7 losses)

• Lower storage costs (security, heating ()
• More storage space
• Less transport
• Less chance of injury
• Lower dead capital

Common causes of inventory losses are:

• Excessive production
• Delays in production or loss of waiting
• Qualitative deficiencies of stocks
• Pointless transport

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Excessive processing (processing) refers to doing more work than necessary and includes redundant activities that do not add value to the product, such as re-examination, recounting or excessive documentation. These steps are usually performed by employees, who represent one of the highest costs in production. This may also include the use of expensive production equipment where cost-effective tools are also sufficient.

Invest in smaller and more flexible equipment or accessories where possible. The goal is to completely eliminate this loss from the work process, as the savings can be very large for the company.

Benefits of Eliminating Loss EXCESSIVE PROCESSING (7 losses)

• Less loaded machines
• Saved time and money
• Higher productivity

Examples of overprocessing include:

• Poor communication
• Not understanding the needs of your customers
• Unnecessary product control or finishing
• Human error
• Slow approval process or excessive reporting

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