Jeff Liker: Is Lean a Waste Elimination Program or Striving for Excellence?

Jeff Liker asks (and answers) the title question in a great Industry Week blog article by the same title.

One of the biggest obstacles we in the lean community need to overcome is our own inertia around “Lean is a process for finding and eliminating waste.”

In the article, Liker brings up a point that is often lost on us: Looking for the problems and negative things kills morale.

The “waste” that you see is the result of underlying issues and culture. Stop overproduction in one place, and it either returns or pops up elsewhere because the underlying reasons for it were never addressed.

Operations that are not operating at a high level of lean typically are lacking underlying process discipline, which leads to these problems and they proliferate daily as the company is in a constant firefighting mode. Trying to eliminate waste in the current system and culture is like identifying and fighting problems—it is debilitating and a losing proposition.

[Emphasis added]

I bolded that phrase for a reason.

We aren’t talking about a technical implementation here. We are talking about a shift in the underlying culture – the habitual ways people interact with one another, with the process, respond to challenges and problems.

Today we have, thanks to Jeff Liker and a few others, an excellent picture of an ideal version of Toyota. We know what it looks like.

Getting there is an entirely different proposition, as most companies that have tried this stuff know first hand. It is hard.

What is beginning to emerge, though, is that the thinking pattern that is learned through solving these problems the right way (vs. just implementing tool sets) is the same thinking pattern required to shift the culture.

It is hard. You have to do the work. But the way to get there is emerging.

What Follows “Yes, but…”

I am in the process of (finally!) reading Mike Rother’s great book Toyota Kata. The book has already gotten great reviews out there, and I am not going to contribute a lot more to that dialog except to say I think it is the first substantial addition to community knowledge about TPS since Steven Spear published his dissertation in 1999.

As I go, I am taking notes of thoughts that are provoked, and I will share a few of them as they come up.

Early in the book, Rother makes a clear distinction between managerial systems that try to cost justify each and every activity, and those which have their focus on an ideal future state.

He cites a number of examples of how the dialog in these companies is shaped by this vision, or lack of it. This is one:

Almost immediately the assembly manager responded and said, “We can’t do that,” and went on to explain why. “Our cable product is a component of an automobile safety system and because of that each time we change over to assembling a different cable we have to fill out lot traceability paperwork. We also have to take to the quality department the first new piece produced and delay production until the quality department gives us an approval. If we were to reduce the assembly lot size from five days to one day we would increase that paperwork and those production delays by a factor of five. Those extra none-value added activities would be waste and would increase our cost. We know that lean means eliminate waste, so reducing the lot size is not a good idea.”

The plant manager concurred, and therein lies a significant difference from Toyota. A Toyota plant manager would likely say something like this to the assembly manager: “You are correct that the extra paperwork and first-piece inspection requirements are obstacles to achieving smaller lot size. Thank you for pointing that out. However, the fact that we want to reduce lot sizes is not optional nor open for discussion, because it moves us closer to our vision of one-by-one flow. Rather than losing time discussing whether or not we should reduce the lot size, please turn your attention to those two obstacles standing in the way of our progress. Please go observe the current paperwork and inspection process and report back what you learn. After that I will ask you to make a proposal for how we can move to a one day lot size without increasing our cost.” [emphasis added]

To this hypothetical Toyota manager, the ideal state is achieving one-by-one flow, on demand, in sequence, as requested, without waste. He sees the drive toward this ideal state as the method to drive the next problems to the surface which, when solved, will remove a round of waste from the process.

There are a number of key points to take away from this.

Avoiding waste vs. removing waste. The assembly manager is confusing the avoidance of wasteful activity from removing wasteful activity from the process. The large lot sizes are avoiding wasteful activity, but it is still there, lurking under the surface as a barrier to further improvement.

One-by-one flow as a crucial goal. In this example, the concept of one-by-one (or one piece) flow worked exactly as it should. The discussion, or attempt, to implement the next step in that direction revealed the next barrier that must be addressed on the way. Without the imperative to reduce lot size toward that ideal, these reasons, justifications, barriers, excuses prevail and the wasteful activity remains. Yes, its effect can be mitigated by larger batches, but applying that logic, why not make the batches even larger?

It isn’t about what waste you can remove. It is about what wastes must be removed to achieve the next target condition. Having this sense of the ideal to define the direction of progress focuses the team on removing the next barrier to higher performance. This keeps things on a path toward higher system performance. Contrast this to the classic “drive by kaizen” approach where we go on waste safari and then look for opportunities where waste we can remove the most easily. This results in a patchwork of improvements that rarely find their way to the bottom line.

Cost justification would say leave the waste there. The cost justification for reducing lot sizes comes primarily from the reduction of inventory holding costs. Unfortunately, unless the inventory is insanely expensive (like jet engines), that alone rarely justifies the effort. But this thinking also stops any further opportunities for improvement in their tracks.

On the other hand, if the goal is to drive toward the ideal of one-by-one in a way that does not increase cost, then once this single-day lot size is achieved, they would be asking “What will it take to get to half a day?” Eventually they will be asking about every part every day. And then true mixed one-item-flow.

At each juncture an important thing happens. They must confront the next problem, and the next waste in the system. They must find a way to remove that wasteful activity without increasing cost. Eventually they will be making one cable each takt time, and following that, making the cables and installing them immediately.

To get there all of the inspections and traceability paperwork requirements will either be removed as no longer necessary or will be built in to the process itself. How will that be done? I don’t know. Nobody knows. That is the point. We can’t solve all of the problems ahead of time, nor can we solve them before they are discovered. The path to the ideal state is vague and unknowable when you begin. It is revealed step by step, as you take those steps.

The key is to have faith that, among all of the people in your operation, someone will find a way to crack that next problem.

This is how you harness people’s creativity.

In his classic JIT Implementation Handbook, Hirano says to force one piece flow to reveal the waste in the system. That was in 1988. Rother introduces the critical human element into the equation. One piece flow is not an abstract concept, it is a critical guide for management decision making.

Rother goes on to make other examples. In each case, the tool or technique – such as takt time or leveling – specifies how we want things to work. That provides a baseline for comparison so we can see the problems we need to work on next.

Here is another example. Ironically, while Rother uses it in his book, I have experienced it in real life. The factory is trying to introduce leveling. They set up a stock of finished goods. They set up a kanban leveling box, and they set up a fairly well thought out process of leveling the demand on the production stock, allowing the inventory to absorb the ups and downs. Their rule is that if the inventory hits a high or low limit, they will take action and assess what is happening.

Then the email arrives – “A big order arrived, and flushed out our inventory, we had to catch up, what do we do?”

After doing what is necessary to recover the system, this was a great opportunity to look at why orders arrive in big batches. In this case, I suspect it was an artifact of the company’s distribution network. The plant is at a critical crossroads.

Each of these examples leads me to the same thought.

The “Yes, but…” and the “Now what?” situations are going to happen. They prove the system is working to surface the next problem to be worked on. The reply that follows decides the fate of your improvement process.

You can reply the way the Toyota manager did in Rother’s example, and work hard to improve your process.

Or you can buy the Basic Story that is presented, and in effect agree that no further improvement is possible on this process, or that “lean doesn’t work for us because [put your “unique situation” here]”.

Which do you do?

Health Insurance Overprocessing Muda

If I had a category for “What are they thinking?” I would probably tag this post with it.

Patient has an eye exam that is covered by her health insurance.

The doctor’s office bills the insurance company.

The insurance company disallows $29.32 in charges because they are above a contractual amount.

The insurance company sends a check for $29.32 to the patient to cover the disallowed charges when she gets the bill from the doctor for the balance.

Do I even need to frame a “Why?” question here?

I think it stands on its own.

Just scratching my head.

Yes, I saw the statements and the check with my own eyes.

Grassroots Innovation: Business is Like Swimming, Not Running

Grassroots Innovation: Business is Like Swimming, Not Running

Let’s take Greg Eisenbach’s totally on-target analogy and expand just a bit. Greg points out:

…a world class swimmer is only 9 percent mechanically efficient. This means 91 calories out of 100 in swimming are lost due to friction.

For the non-world class swimmer the best way to increase your speed is not to spend more calories, but figure out how to become more efficient. A gain from 3% efficiency to 4% efficiency would represent a 33% increase.

Business is the same way.

This probably explains why a little thing like the new technology in competitive swimming suits had such a huge (and controversial) impact in the 2008 competitive season. In competitive swimming, small advantages are huge advantages.

One of the big differences, though, between swimming and business is that a competitive swimmer knows, in real time, that he is winning or losing. Triathlons aside, a typical swim race is under a minute, a long one might be a couple. In this competitive environment, it is impossible to be complacent and believe you are in the race when, in fact, you are not.

On the other hand, I have worked with a number of businesses (or operations within larger businesses) that have had a truly amazing capacity for denial. What else can explain a headline in a company’s internal newspaper that exclaimed the “big order” when, in fact, the customer had placed a mixed order, giving 80% of it to the competitor… but no mention of that inconvenient truth. So when this company also wonders why people feel “no sense of urgency” you have to wonder. Of course the real story was all over the local news, about how the competitor had gotten the bulk of the order, and how the local company had “lost” it, only getting 20%. What does that do for the corporate credibility? Not much.

World class swimmers are 9% efficient. World class manufacturing value streams are about 40% value-add. (By % value-add I mean the time the product is actually in the value stream vs. the time something that matters is actually being done to it.)

Contrast this with a typical manufacturing flow where the value-add can easily drop into single digits.

This is basic stuff, but sometimes we forget what this lean stuff is about.

Consider a 10% value-add flow. Out of 100 minutes in the plant, 10 minutes are spent actually processing. The other 90 minutes are just sitting, moving, counting, stacking, etc.

Let’s say I spend my time and energy to speed up the value-adding process (like make the chips fly faster, speed up the processing time, find some high-tech fast curing compound). Let’s say I am really successful and cut that value-adding time in half. Whoo-hoo.

Now out of 95 minutes in the plant, 5 minutes are spent actually doing something.

Not exactly a stellar improvement, no real impact on lead time, no reduction in inventory, no reduction in waste. All of the original costs are still there, and I have probably just added more.

On the other hand, if I were to focus my time and energy on reducing that 90 minutes of “other stuff” I run into a couple of realities.

First, all of that “other stuff” costs time, money, space and accumulates inventory. It adds to lead time. Cutting it in half cuts the lead-time from 100 to 55.

And critically important – these changes are typically pretty easy to make. They don’t require engineering or computer science degrees, they just require watching the work and asking “Why is this stopping, why can’t it just go to the next operation right away?”

Greg is dead-on with his analogy. The difference, though, is that there is much higher potential for businesses to improve than there is for swimmers.

But like swimming, small advantages are huge advantages. It isn’t the companies that make the “blitz” type of changes that are sustaining world-class players. It is the companies that, every day, scratch out another little improvement.

It is those “a little every day” companies that, over time, build an insurmountable lead. They engage more of their people, and they learn as an organization what continuous improvement is all about. The “blitz” approach retains the knowledge in the few experts who are responsible for all of the kaizen activity. As good as they may be, they can’t be everywhere.


I guess four months into this, it kind of makes sense to talk about waste. But rather than repeat what everyone else says, maybe I can contribute to the dialog and toss out some things to think about.

Identifying / Seeing Waste.

Taiichi Ohno had 7 wastes, a few publications say 7+1. I have always disliked trying to put “types of waste” into buckets. I have seen long discussions, some of them fairly heated, about which list of wastes is “correct” and whether this waste or that waste should be included, or whether it is included in another one. None of this passes the “So What?” test. (A related military acronym is DILLIGAS, but I’ll leave it as an exercise for the reader to work out what it means.)

The problem, as I see it, with lists of categories isn’t the categories themselves. It is that we teach people using the categories. We make people memorize the categories. We create clever mnemonics like TIMWOOD and CLOSEDMITT. We send them on waste safari with cameras to collect “examples” of various types of waste. Well.. you can’t take a photo of overproduction because it is a verb. You can only photograph the result – excess inventory. So which is it? People end up in theological discussions that serve no purpose.

Like I mentioned in an earlier post, teach it by inverting the problem. The thing people need to understand is this: Anything that is not adding value is waste. If you understand what value is, then waste is easy to see. It is anything else. What category of waste is that? Who cares. That only matters when you are working on a countermeasure.

What about “necessary waste?” Even Ohno concedes there is some of that. OK – ask “does this work directly enable a task that does add value?” Then it is probably necessary – for now.

Let’s take a real-world example from my little corner of the world – welding. Welding is pretty easy. If there is an arc, it is very likely value is being added. Not always, but it is a good place to start. Now – watch a welder. What does he do when he is not “burning wire?” (the phrase “and producing a quality weld” has to be tacked onto the end of this because I can burn wire, but it doesn’t mean I am welding.)

What stops the welder from welding? When, and why, does he have to put down the gun and do something else? For that matter, what makes him let go of the trigger and stop the arc? Is he loading parts into the jig? Does he have to jiggle those parts into place? Does he have to adjust the jig?

Special Types of Waste

In spite of what I said above, there are two types of waste that merit special attention. Most everyone who can spell “J-I-T” knows that overproduction is one of them. I won’t go into it here – anyone who is reading this probably already gets that at some level. If I am wrong about that, leave a comment and I’ll expand.

The other is the “waste of waiting.” Of all of the categories, overproduction is clearly the worst, but the waste of waiting is the best. Why?

It is the only type of waste that can be translated directly into productivity. It is the waste you are creating as you are using kaizen to remove the others. That is because all of your kaizen is focused on saving time and time savings, in the short term, turn busy people into idle people.

Let me cite some examples:

  • The Team Member is overproducing. You put in a control mechanism to stop it. Now the team member must wait for the signal or work cycle to start again before resuming work.
  • You remove excess conveyance by moving operations closer together. The person doing the conveyance now has less to do. He is idle part of the time where he was busy.
  • Defects and rework – eliminate those and there is less to do. More idle people.
  • Overprocessing – eliminate that, less to do.
  • Materials – somebody has to bring those excess materials. Somebody has to count them, transport them, weigh them. Somebody has to dispose of the scrap.
  • Inconsistent work or disruptions: Eliminate those and people are done early more often than they were. More idle time.

If you look at a load chart, these are all things which push the cycle times down. You have converted the other wastes to the waste of waiting.

Now your challenge is how to convert that wait time to productivity. What you do depends on your circumstance. You can drop the takt time and increase output with the same people. Or you can to a major re-balance and free up people – do the same with fewer, and divert those resources to something productive elsewhere.

Does something stop you from doing that? Do you have two half-high bars that you can’t combine onto one person? Start asking “Why?” and you have your next kaizen project. Maybe you have to move those processes closer together, or untie a worker from a machine.


  • Don’t worry too much about teaching categories of waste. Teach people to see what is truly value-adding, and to realize everything else is waste – something to streamline or eliminate.
  • In most cases your kaizen activity will result in more waste of waiting. This is good because wait-time is the only waste that converts directly to increased productivity.