Discussions of Lean often contain statements like the following:
In a lean manufacturing environment, waste is defined as spending resources on any activity that does not add value to the end customer.
While such statements sound deep in casual conversation, they are impractical. First, not having access to end customers, most employees are left to guess what they might value, and second, much of the work of manufacturing is unintelligible to end customers, like revision control on engineering changes. Everyone recognizes the existence of such activities, but the above definition of waste leads to calling them “non-value added but necessary” or, even worse, “necessary waste.”
Having to resort to such convoluted oxymorons is a clear sign that there is something amiss in the definition. The English literature on Lean uses “waste” as translation of the Japanese “muda,” which just means unnecessary. If an activity is muda, you are better off not doing it. Overproduction is muda because you don’t need it, and so are excess inventory, overprocessing, etc.
More formally, if you eliminate muda, your performance does not degrade in any way. It also means that muda is what keeps your operations from being Pareto-efficient, because, if you didn’t have any muda, there would be no way to improve any aspect of your performance without making others worse.
The bottom line is that there are only two kinds of activities in manufacturing: those you need to do and those you don’t. And you can tell them apart without asking an end customer, by using, for example, Ohno’s famous list of 7 categories.
In what you need to do, you pursue effectiveness and efficiency; for what you don’t, elimination. It is a simple idea. It gets complicated enough when we work out its practical consequences. But we don’t need to make it unnecessarily complicated.