Chapter 6
Operational Auditing Part 2
Tools
Eight Areas of Waste (Lean
Concept)
• Waste occurs when more resources are used
than necessary
• Concept developed in Toyota Production
System
• Lean identifies 8 types of waste
• Reducing waste increases profitability
1. Transportation Waste
• Unnecessary movement of people, products,
or information
• Adds cost but not value
• Risk of damage or delays
• Goal: minimize movement
2. Unnecessary Inventory
• Excess raw materials, WIP, or finished goods
• Ties up capital
• Increases risk of damage or theft
• Lean goal: lowest possible inventory
3. Excess Motion
• Unnecessary movement during work
• Examples: bending, lifting, reaching
• Causes fatigue and inefficiency
• Slows the process
4. Waiting
• Idle time when work is not being performed
• Waiting for materials or instructions
• Products often spend most time waiting
• Goal: reduce delays
5. Overprocessing
• Doing more work than customer requires
• Using overly complex processes
• Excess paperwork or approvals
• Adds cost without value
6. Defects
• Errors requiring rework or replacement
• Includes incorrect reports or poor quality
products
• Increases cost and damages reputation
• Rule: don't accept, make, or pass defects
7. Overproduction
• Producing more goods than needed
• Often due to poor forecasting
• Creates inventory waste
• Hides other inefficiencies
8. Underutilized Employees
• Failure to use employees' full skills
• Employees have additional talents
• Encouraging ideas improves processes
• Supports continuous improvement
Affinity Diagram
• Tool used to organize large sets of ideas
• Often used after brainstorming
• Groups related ideas into clusters
• Helps build team consensus
Check Sheet
• Structured form used to collect data
• Also called tally sheet
• Tracks frequency of events or errors
• Helps identify patterns
Scatter Diagram
• Graph used to analyze relationship between
two variables
• Also called scatter plot
• Shows correlation patterns
• Useful for identifying root causes
5S Workplace Method
• Japanese workplace organization system
• Improves efficiency and cleanliness
• Five steps: Sort, Set in Order, Shine,
Standardize, Sustain
5S Workplace Method
1. Sort (Seiri): Eliminate unnecessary items from the
workspace, keeping only what is essential for daily
tasks.
2. Set in Order (Seiton): Arrange necessary items for
easy access, labeling, and organizing them for
optimal workflow.
3. Shine (Seiso): Clean the work area regularly to
maintain equipment and spot potential issues early.
4. Standardize (Seiketsu): Create consistent procedures
and schedules for the first three steps to ensure they
become habitual.
5. Sustain (Shitsuke): Maintain discipline through
training, audits, and continuous improvement to keep
the system working.
RACI Matrix
• Tool defining roles in a process
• Responsible: performs work
• Accountable: approves results
• Consulted: provides input
• Informed: receives updates
SIPOC Diagram
• High-level process mapping tool
• Suppliers, Inputs, Process, Outputs, Customers
• Helps auditors understand processes
• Useful for defining audit scope
Poka Yoke
• Mistake-proofing technique
• Prevents human errors
• Examples: sensors, plug orientation
• Goal: eliminate defects
Benchmarking
• Comparing performance metrics
• Measures performance against best practices
• Helps identify improvement opportunities
• Common metrics: time, cost, quality
Five Whys
• Root cause analysis technique
• Repeatedly ask 'Why?'
• Helps identify underlying issues
• Simple but powerful tool
Work Breakdown Structure
• Project management planning tool
• Breaks projects into smaller tasks
• Helps estimate resources and timelines
• Improves planning and control
Benefits of These Tools
• Improved operational efficiency
• Better root cause identification
• Enhanced decision making
• Supports continuous improvement
End of Presentation