Muda (無駄, on’yomi reading) is a Japanese word meaning “futility; uselessness; wastefulness”, and is a key concept in lean process thinking, like the Toyota Production System (TPS) as one of the three types of deviation from optimal allocation of resources (the others being mura and muri). Waste reduction is an effective way to increase profitability.
From an end-customer’s point of view, value-added work is any activity that produces goods or provides a service for which a customer is willing to pay; muda is any constraint or impediment that causes waste to occur.
The 7 forms of Muda:
Muda #1 – Transport
Each time a product is moved it stands the risk of being damaged, lost, or delayed, on top of being a cost for no added value. Transportation does not make any transformations to the product that the consumer is willing to pay for.
Muda #2 – Motion
Not to be confused with Transport, Motion refers to the damage that the production process inflicts on the equipment or person that creates the product, not the damage to products themselves. For example, discrete events, like accidents that injure workers and damage equipment, or even wear and tear, are also part of the consideration.
Muda #3 – Waiting
Time is always of the essence in production. Whenever goods are not in transport or being processed, they are in a stand still waiting for the next production step. In traditional processes, goods spend a large part of their individual product life waiting to be worked on.
Muda #4 – Inventory
Inventory, in the form of raw materials, work-in-process (WIP), or finished goods, represents a capital outlay that has not yet produced an income either by the producer or for the consumer. Any of these three items not being actively processed to add value is a waste.
Muda #5 – Over-Production
Over-production occurs when more product is produced than is required at that time by your customers. In many cases when a large amount of inventory is stock-piled, part of that inventory gets wasted because consumer demands change over time.
Muda #6 – Over-Processing
Over-processing results from poor tool or product design creating unnecessary activity. This Muda occurs any time more work is done on a piece beyond what is required by a customer. This also includes using components that are more precise, complex, higher quality or expensive than absolutely required. Think about the scraps that often result from poor product or process design – that’s over processing.
Muda #7 – Defects
Whenever defects occur, extra costs are incurred in reworking the part, rescheduling production, etc. This results in additional labor costs, more time in the “Work-in-progress” stage. Defects, in practice, can sometimes double the cost of a product. This should not be passed on to the consumer and should be taken as a loss.