Let's understand five principles of lean in brief before identifying different types of waste that can take place in an organization.
The critical starting point for lean thinking is value. Value can only be defined by the ultimate customer. And it's only meaningful when expressed in terms of a specific product (a good or a service, and often both at once), which meets the customer's needs at a specific price at a specific time."Value must be externally focused. Only what your customers perceive as value is important. Any activity of the process that doesn't add value to ultimate product is a waste. In other words, any activity of the process which is not paid by the customer is also a waste.
Identify Value Streams
Once you understand the value that you deliver to your customers, you need to analyze all the steps in your business processes to determine which ones actually add value. If an action does not add value, you should consider changing it or removing it from the process. The value stream is the set of all the specific actions required to bring a specific product through the critical management tasks of any business. Identifying the entire value stream for each product is the next step in lean thinking, a step which firms have rarely attempted but which almost always exposes enormous, indeed staggering, amounts of waste.
Instead of moving the product from one work center to the next in large batches, production should flow continuously from raw materials to finished goods in dedicated production cells. Only after specifying value and mapping the stream can lean thinkers implement the third principle of making the remaining, value-creating steps flow. Converting batch or queue to continuous flow (single piece flow) is the key to have a smooth flow of material or customer throughout the process. This is where you make your customer or material king in your business process.
Rather than building goods to stock, customer demand pulls finished goods through the system. Work is not performed unless the part is required downstream. As a result of the first three principles, lean enterprises can now make a revolutionary shift: instead of scheduling production to operate by a sales forecast, they can now simply make what the customer tells them to make. In other words, no one upstream function or department should produce a good or service until the customer downstream asks for it.
Perfection - Six sigma quality
As you eliminate waste from your processes and flow product continuously according to the demands of your customers, you will realize that there is no end to reducing time, cost, space, mistakes and effort. After having implemented the prior lean principles, it is necessary to improve the capability of a process to produce exactly what customer wants. This is the step at which you need to apply six sigma systems to achieve near perfect products.
ISL- Certified Six Sigma Black Belt