Muda (Japanese term)

When determining whether the concept of muda applies, the concept of "value-added work" is considered. Value-added work is any activity that produces goods or provides a service for which an end-customer is willing to pay; muda is any constraint or impediment that causes waste to occur.

There are two types of muda:

• Muda type I: non value-adding, but necessary for end-customers. These are usually harder to eliminate because while classified as non-value adding, they are necessary.
• Muda type II: non value-adding and unnecessary for end-customers. These contribute to waste, incur hidden costs and should be eliminated.

Toyota's seven forms of waste

Taiichi Ohno, the "father" of the Toyota Production System, originally identified seven forms of muda or waste:

Transporting

Every time a product is touched or moved unnecessarily, there is a risk that it could be damaged, lost, delayed, etc. as well as being a cost for no added value. Transporting does not add value to the product, i.e. is not a transformation for which the consumer is willing to pay.

Inventory

Whether in the form of raw materials, work-in-progress (WIP), or finished goods, inventory represents a capital outlay that cannot yet produce an income. The longer a product sits in one of these states, the more it contributes to waste.

Motion

In contrast to transportation, which refers to damage and transaction costs associated with moving the product, motion refers to the damage and costs inflicted on what creates the product. This can include wear and tear for equipment, repetitive strain injuries for workers or unnecessary downtime.

Waiting

Whenever the product is not in transportation or being processed, it is waiting (typically in a queue). In traditional processes, a large part of an individual product's life is spent waiting to be worked on.

Over-production

Making more of a product than is required results in several forms of waste, typically caused by production in large batches. The customer's needs often change over the time it takes to produce a larger batch. Over-production has been described as the worst kind of waste.

Over-processing

Doing more to a product than is required by the end-customer results in it taking longer and costing more to produce. This also includes using components that are more precise, complex, expensive or higher quality than absolutely required.

Defects

Having to discard or rework a product due to earlier defective work or components results in additional cost and delays.

Unused skills

Organizations often under-utilize the skills of their workers, or permit workers to operate in silos so that knowledge is not shared. This was added to the original seven forms of waste, as resolving this waste is a key enabler to resolving the others.

A mnemonic may be useful for remembering the categories of waste, such as TIM WOOD or TIM WOODS (with the S referring to Skills).