2015_Edition 1 - Value and waste

July 2015
Edition
LEANFORMAZIONE
Value and Waste

Dear Colleagues,
in a society based on information, the promptness and reliability of “knowledge”, of knowing
what is happening in order to be able to understand what could happen, is fundamental.
To inform means “to give shape”, in other words to activate a creative process of building
and organising meanings and knowledge. To inform means to transmit ideas in a clear,
complete, reliable and useful way so that they can be used to solve a problem, improve a
situation, avoid ambiguity and obtain other useful information.
We talk about communication when the information trasfer leads to the
creation of a relationship and therefore generates a connection between parts.
From the Greek language, Koinè (participate) and from the Latin language, Comunico (put
together), communicate therefore means:
✓✓to share
✓✓to open up to the other person
✓✓to create a place of exchange
✓✓to activate a relationship and a process of interaction
✓✓to stimulate the process of acquisition of new meanings and knowledge

This is why LEANFORMAZIONE has been created, the newsletter that wants to
communicate to All Lima employees a periodic information on how our company is
changing, in which areas this has occurred and is occurring, which other challenges we
see in the future, which are the operating tools we will use as a valid help to improve our
processes.
LEANFORMAZIONE =
INFORMATION + TRAINING about the main LEAN activities
in other words the right mix of culture (learning) and knowledge (information) with the overall
objective of creating and consolidating the cultural basis to eff ectively apply the methods
of continuous improvement, obtain the ever greater involvement of the company’s human
resources (which will be the real key to the success of the LEAN transformation) and
provide the information tools necessary to activate a discussion and, especially, create a
movement of opinion and an environment favourable for the development of new initiatives.
“Communicating and exchanging information is nature, taking into account the
information given to us is culture” Johann Wolfgang Goethe
Sincerely,
Fabio Domevscek
Lean Thinking Manager
Lima Corporate

Our reorganizational journey to become a LIMA LEAN ENTERPRISE
starts from one of the cornerstones of the LEAN culture: continuously
searching and maximizing the value for the customer.
This is the key objective of the Excellent Supply Chain area.
VISION &
COMMITMENT
EXCELLENT
PEOPLE
EXCELLENT
BUSINESS
PROCESS
EXCELLENT
SUPPLY CHAIN

LEANFORMAZIONE
STRUCTURE OF THE
BROCHURE
Learning Pill / introduces step-by-step a principle connected to one of the four areas:
Vision & Commitment, Excellent People, Excellent Supply Chain and Excellent Business Process
Pilot project / on which it is operationally applied what was explained in the Learning Pill
Recommended book / with reference to the subject being discussed

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INDEX
01 LEARNING PILL: THE 7+1 “MUDA” page 08
02 PILOT PROJECT: NEW ADVANCED WAREHOUSE page 12
03 RECOMMENDED BOOK: THE ART OF IMPROVING page 16

01 | LEARNING PILL: THE 7+1 “MUDA”
LEARNING PILL
01
THE 7+1 “MUDA”
WHAT IS VALUE? It is everything that is worth doing and makes sense to expand and repeat, to obtain
ever greater benefit. Therefore, in a company, value is everything that the customer is willing to pay.
Let’s ask ourselves then: “Is the customer willing to pay...
1. The material waiting to be manufactured or to be sold?
2. Defected products?
3. More finished products than requested?
4. Internal transportation of material, from one part of the factory to the other?
5. Redundant revisions, repeated controls, unnecessary hard copies, unnecessary transactions or
signatures?

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6. The unnecessary movements that the workers must perform daily (i.e. cross the department to get an
adjustable wrench, go to various offices to deliver paper copies)?
7. An operator waiting for parts coming from the previous working phase?
If the answer to these 7 questions is “NO”,then it means that all this (overstock, defects, overproduction,
transportation, complex processes, operators movements, waiting time) is absolutely not value! And so,
what is it? It is “MUDA”, waste (in Japanese), everything that consumes resources increasing costs,
without adding value to the product.
In reality, even the incorrect “use” of people is a waste! Not paying attention to the ideas or the observations
of the workers is a lost opportunity for the company to enhance the skills, improve operational activities
and increase the customer’s satisfaction level. Therefore, if in literature we have always talked about
“7 types of waste”, recently an eighth waste has been added: the waste of unused human potential!
Every process can hide “muda”: in the office, in the manufacturing area or simply in daily life (if standing in
line at the post office had value, everyone would like to wait for hours over there!).

01 | LEARNING PILL: THE 7+1 “MUDA”
But how can we “discover” them? We have TO GO AND SEE: taking time to look and analyse with critical
eyes our processes, freeing up ourselves for a second from daily life and routine, we will manage to
distinguish the activities with value from waste.
Why, lately, do we hear so much talk about waste and the need to reduce it? Because in the past the valid
equation was:
PRICE = COST + PROFIT
where the profi t was “just a reward” for the efforts and the costs incurred to create a product or provide
a service. Now in a market in which the competitiveness between companies is at the highest levels, the
equation is:
PROFIT = PRICE – COST
where profi t is a “privilege” obtained thanks to the reduction of costs, by applying the techniques of
Lean Thinking.
All improvement projects in progress and the ones that will be launched in the
future will be based on the waste removal in order to maximise the value perceived
by the Customer.

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08
Unused human
potential
Excessive stock
in the warehouse 01
Defects
in Production
02
Overproduction
07
Waiting time
“MUDA”
03
06
Useless and frequent
movements
of employees
05
Complex
processes
Unnecessary internal
04
transportation

02 | PILOT PROJECT: NEW ADVANCED WAREHOUSE
PILOT PROJECT
02
NEW ADVANCED
WAREHOUSE
INTRODUCTION
One of the most important examples of “muda” elimination is represented by the New Advanced
Warehouse. The New Advanced Warehouse project was created to increase the number of parts that
could be delivered per day from the finished products warehouse of Villanova, by eliminating the activities
with no value added and standardising the necessary ones.
PROJECT STRUCTURE
In line with the guiding principles of Lean Thinking the project is divided into the following phases:
• mapping of the state of the art of the process, from order entry to shipping of the finished products to
the final Customer;
• flow analysis of the operational activities through critical observation of every single activity;
• waste identification and definition of the most significant opportunities for improvement;
• design of the future state characterised by the elimination of the activities with no added value (waste)
and the automation of some of them.

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The principal wastes we fi ghted are the following:
Type of waste
REWORKINGS
& DEFECTS
Improvement activity
Automatic calculation of the optimal size of the package
Type of waste
MOVEMENTS
OF PEOPLE
Improvement activity
Picking activities close to the conveyor belt;
the items are put in the picking carts directly by the robot
Type of waste
TRANSPORTATION
OF MATERIALS
Improvement activity
The parts are picked one by one and placed on the conveyor
belt which is next to the vertical warehouses
Type of waste
WAITING TIME
Improvement activity
Processing 4 picking lists at
the same time to decrease the waiting time of operators
Type of waste
COMPLEX
PROCESSES
Improvement activity
• Automatic second reading of items
• LED system to localize the parts to be picked by the operator immediately

02 | NEW ADVANCED WAREHOUSE
THIS PROJECT WILL ALLOW US TO ACHIEVE THE FOLLOWING RESULTS:
Increase of the number of shipped items from an average of 2,500 to 5,000
Average picking time reduction from 20 sec/pc to 5 sec/pc
Automatic second reading
Optimisation of occupied area
Increase of standard operations
Operators morale and well-being improvement

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15

03 | THE ART OF IMPROVING
03
RECOMMENDED BOOK:
THE ART OF IMPROVING
“MUDA” gets our lives worst, not only inside companies but also in our daily
life, and we will get huge benefi ts by eliminating them: “muda” is “waste” (of
time, of space), it is chaos and disorganisation, it is what makes us waste
energy which could instead be used to develop ideas and projects. When
travelling, have you ever thought about how an airline company organises its
processes and how the people work within them?
If you don’t take a plane and prefer to travel by car making stops to eat,
have you ever thought about how much waste there is in a restaurant on
the highway?
You will fi nd the answers to questions like these in the new book of
Arnaldo Camuff o (Professor at the Bocconi University of Milan, where he teaches Lean
Management), which shows us how, by observing with a critical eye what is happening
around us, it is possible to improve and optimize all activities by eliminating waste.

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"The art of improving - Made in Lean Italy in order to compete again", Arnaldo Camuffo, Marsilio Ed.

“Communicating and exchanging
information is nature, taking into account
the information given to us is culture”
Johann Wolfgang Goethe

NOTES

NOTES

Limacorporate spa
Via Nazionale, 52 - 33038 Villanova di San Daniele - Udine - Italy
Tel.: +39 0432 945511 - Fax: +39 0432 945512
E-mail: info@limacorporate.com
www.limacorporate.com