8 Types of Logistics Waste Within an Organization

You may have read or possibly heard people talking about the 8 types of waste.  It's one of the core competencies of Lean Six Sigma programs and is a useful roadmap for all industries in finding savings opportunities, regardless if they practice Lean Six Sigma or not. 

Quality programs have become quite sophisticated at rooting out waste in logistics operations.  Within organizations, we've got our own processes, forms, and protocols to drive, identify and address inefficiency.  But sometimes it's a good idea to get back to the basics.  With that in mind, let's revisit the 8 types of logistics waste.   

Defects: Errors made on daily tasks, creating defective parts, or anything else that creates rework.  Logistics quality depends on doing it right the first time.  Examples include: turnover, absenteeism, improper trip routing, incorrect product shipped, inaccurate data entry.

Over Production: Producing more or doing more than is needed.   This type of waste costs money, creates inventory, and increase effort hours.  Examples include:  filling out unnecessary spreadsheets, sending out unneeded emails, putting too much shrink wrap on pallets, not taking advantage of collaborative distribution opportunities.

Transportation: Unnecessary movement of material, product, or goods.  This waste is often associated with damage of product during transit, increased production time, increased transportation costs, taking up more floor space than needed.  Unnecessary transportation not only creates waste in operations, it adds to our carbon footprint, an increasingly important metric in logistics quality programs. 

Waiting: Time wasted for the process step to be completed.  This waste causes bottlenecks in workflow, can lead to service failures, and adds time to process/product completion.  Examples include: waiting for trailers to be unloaded, scheduling hours that match volumes, waiting for others to make decisions, waiting for paperwork. Check out our full eBook on management of lean quality programs.

Inventory: WIP (work in process) being completed before it is needed.  Added product eats up available space, has a greater chance of being damaged, can become expired before using, and adds carrying costs.  Examples include: having more trucks or trailers than are needed, excessive tire and parts inventory, keeping records or files for longer than is required.

Motion: Unnecessary movements of people.  Is your facility laid out properly to ensure minimal movements between process steps?  Are your work stations set up ergonomically?  This waste increases completion times and increases likelihood of injuries.  Addressing this aspect of logistics quality requires trained industrial engineers to design layouts and process flows to minimize movement.  

Processing: Doing more than is required.  This waste consumes resources, time and inhibits our ability to address other vital customer tasks.  Examples include: requiring an excessive amount of signatures or approvals, creating reports that no one needs or reads, using a truck that has a larger engine that is needed, using a trailer that is longer than needed.

Intellect: The most overlooked waste – not utilizing people to their maximum potential.  You know the saying, "The mind is a terrible thing to waste".  Look to hire the best and brightest…invest in continuous improvement, and empower your people to deliver results.

Finding Logistics Waste

How do you find this waste in logistics operations or any aspect of your business?  The easiest way is to simply go to areas of concern and just observe.  Bring a pad and pencil along with a list of the 8 types of wastes.  See how many of the wastes you can identify then develop an action plan for resolution.  To take an even deeper dive, develop a process flow map that identifies value added and non-value added steps in a process.  Try to eliminate as many of the non-value added steps as possible. 

You will be surprised how much low hanging fruit there is waiting to be picked.