What Is the Lost Value: Muda and Constraints

This chapter explains fundamental issues to understand the ineffectiveness in organizational processes, namely, value, waste, and constraints. Value constitutes the framework for understanding how it is created and how it is lost. Then, this chapter explains the concept of muda (waste) and provides arguments on why muda is harmful to the value produced in the process stream, with many examples of muda delivered. Another key issue of this chapter is constraints, along with their identification. The difference between a constraint and a bottleneck is explained. Selected methods for identifying bottlenecks are described, including process cycle time, work-in-process inventory, and cycle time including production losses. This chapter closes with a case study of a company from the printing industry, in which the issue of accurate bottleneck identification is examined.