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102 CHAPTER 3 • SubSTiTuTES foR STRATEgy
Waste elimination

This is arguably the most significant part of the lean philosophy: the elimination of all
forms of waste, where waste is any activity that does not add value. Identifying waste is
the first step towards eliminating it. The car manufacturer Toyota has described seven
types. Here we consolidate these into four broad categories of waste that apply in many
different types of operation:
1 Waste from irregular flow – Perfect synchronisation means smooth and even flow
through processes, operations and supply networks.
2 Waste from inexact supply – Perfect synchronisation is supplying exactly what is
wanted, exactly when it is needed. Any under or over supply and any early or late
delivery will result in waste.
3 Waste from inflexible response – Customer needs can vary, in terms of what they want,
how much they want and when they want it. But unless an operation is flexible, it
can make change only infrequently. This mismatch is the cause of much inventory –
for example, because machines make a large batch of similar products together.
4 Waste from variability – Synchronisation implies exact levels of quality. If there is vari-
ability in quality levels then customers will not consider themselves as being adequately
supplied. Variability therefore is an important barrier to achieving synchronised supply.
Some organisations, especially now that lean is being applied more widely in service
operations, view waste elimination as the most important of all the elements of the lean
approach. In fact, they sometimes see the lean approach as consisting almost exclu-
sively of waste elimination. What they fail to realise is that effective waste elimination
is best achieved through changes in behaviour. It is the behavioural change brought
about through synchronised flow and customer triggering that provides the window
onto exposing and eliminating waste.

Capacity utilisation may be sacrificed in the short term
A paradox in the lean concept is that it may mean some sacrifice of capacity utilisa-
tion. In organisations that place a high value on the utilisation of capacity this can
prove particularly difficult to accept. It occurs because, when stoppages occur in the
traditional system, the buffers allow each stage to continue working and thus achieve
high-capacity utilisation. The high utilisation does not necessarily make the system as
a whole produce more because the extra production goes into the large buffer inven-
tories. In a lean process, stoppages will affect the rest of the operation. This will lead
to lower-capacity utilisation, at least in the short term. However, there is no point in
producing output just for it to increase inventory. In fact, producing just to keep utili-
sation high is not only pointless, it is counter-productive, because the extra inventory
produced merely serves to make improvements less likely.

Criticisms of lean

The lean approach to people management can be viewed as, at best, patronising. It may
be less autocratic than some earlier Japanese management practices, but it is not always
in line with ‘Western’ job design philosophies. Even in Japan, the JIT (just-in-time)
approach is not without its critics. S. Kamata wrote an autobiographical description of
life as an employee at a Toyota plant called Japan in the Passing Lane. His account speaks

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