Muda

A Japanese term used in the context of lean production and lean thinking, meaning any activity that consumes resources but creates no value. Type 1 muda consists of activities which create no value but which are, at present and for practical purposes, unavoidable, such as issuing invoices. Type 2 consists of activities which do not have a useful function: they just happen, and things would go better without them. It is on this kind of muda that the attention of lean thinking is focused, and it comes in many forms:^M38

1. Mistakes and defects in products: the time and cost of making them and repairing them.

2. Excess production: producing goods which end up unsold.

3. Inventory: producing goods and parts which then sit for a long time in a warehouse.

4. Unnecessary processing, or steps in the process.

5. Unnecessary actions to carry out a process.

6. Unnecessary movement and transport of goods and parts.

7. Waiting time: standing around waiting for parts to be delivered.

8. Specification: production of goods and services which are not what the customer wants.

9. Job description: a task being left undone because it is not in the person’s job description.

10. Obtuseness: a job being left undone because the person is not paid to think.

11. Signal failure: a culture which provides no motivation for success, or in which the incentive structure (contrary to intention) is set to reward inaction and failure.

12. An enterprise built on a foundation of blather.

You can probably think of more, or at least variants, such as bad communication, demoralisation, effort diverted into appeasing litigious customers or an interventionist government, and loss of local control over critical decisions. However they are defined, it turns out that the greater part of the work of institutions (such as health, education and policing services) consists of tasks other than what they are there to do. Their effort is sucked into sequences of muda—making errors, being drawn into an extended series of errors when trying to correct them, maintaining structures of control and recordkeeping, decision-seeking, standardised procedures, waiting, inflexible job definitions—and a prohibition of discretion and judgment. The scale of muda in an organisation is indicated by the scale of the savings that can be achieved when it is removed.

Its removal can . . .

. . . double labor productivity all the way through the system. . . . If you can’t quickly take throughput times down by half in product development, 75 percent in order processing, and 90 percent in physical production you are doing something wrong.

James Womack and Daniel Jones, Lean Thinking.^M39

The existence of waste of this magnitude suggests that, in the settled, resilient economy of the future, travelling light—living within a dramatically reduced scale of intermediate economy—is a realistic option. With lean thinking in place, and muda purged, the effectiveness of local economies in the future could exceed expectations and form the basis of a resilient, long-lived political economy.^M40

Related entries:

Five Whys, Relevance Fallacy.