Lean thinking is a process focused on increasing the value added to products and services and the reduction of waste. The term “lean,” coined by Womack during one of his visits to the Japanese carmaker Toyota in the early 1980s (Womack and Jones 2003), has become the universally accepted term for increasing value and reducing waste.
When talking about value, we refer to everything undertaken with a product or a service for which customers are willing to pay extra. Waste, conversely, refers to all activities that do not add value from the customer’s point of view, i.e., everything for which customers are not willing to pay extra.
Examples of added value for manufacturers include extra product features deemed valuable by customers, shorter lead times, and more convenient deliveries in smaller batches. On the other hand, activities such as keeping excessive inventories, unnecessary transportation, waiting time, and reprocessing are considered waste (Womack, Jones, and Roos 1991). For a service organization, common sources of wastes are long customer waiting times, reprocessing of applications, incorrect automatic charges, and excessive paperwork. In general, there are seven types of waste present in processes.
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