Overview of the Toyota Production System
The wastes noted above are commonly referred to as non-valued-added activities, and are known to Lean
practitioners as the Eight Wastes. Taiichi Ohno (co-developer of the Toyota Production System) suggests that
these account for up to 95% of all costs in non-Lean manufacturing environments. These wastes are:
• Overproduction – Producing more than the customer demands. The corresponding Lean principle is to
manufacture based upon a pull system, or producing products just as customers order them. Anything
produced beyond this (buffer or safety stocks, work-in-process inventories, etc.) ties up valuable labor and
material resources that might otherwise be used to respond to customer demand.
• Waiting – This includes waiting for material, information, equipment, tools, etc. Lean demands that all
resources are provided on a just-in-time (JIT) basis – not too soon, not too late.
• Transportation – Material should be delivered to its point of use. Instead of raw materials being shipped
from the vendor to a receiving location, processed, moved into a warehouse, and then transported to the
assembly line, Lean demands that the material be shipped directly from the vendor to the location in the
assembly line where it will be used. The Lean term for this technique is called point-of-use-storage
(POUS).
• Non-Value-Added-Processing – Some of the more common examples of this are reworking (the product or
service should have been done correctly the first time), deburring (parts should have been produced without
burrs, with properly designed and maintained tooling), and inspecting (parts should have been produced
using statistical process control techniques to eliminate or minimize the amount of inspection required). A
technique called Value Stream Mapping is frequently used to help identify non-valued-added steps in the
process (for both manufacturers and service organizations).
• Excess Inventory – Related to Overproduction, inventory beyond that needed to meet customer demands
negatively impacts cash flow and uses valuable floor space. One of the most important benefits for