As opposed to value creation, waste denotes all activities that, from a customer standpoint, add no value to a product.

Taiichi Ohno categorized waste into obvious waste and hidden waste. Obvious waste can be eliminated, hidden waste can only be minimized.

Taiichi Ohno also divided waste into seven types:

  1. Overproduction (more parts are produced than currently needed)
  2. Inventory (includes raw materials and purchased components)
  3. Rework
  4. Over-processing (processes not adapted, e.g. processes too large, ergonomics lacking)
  5. Transportation
  6. Motion of employees within the workflow
  7. Waiting time (of employees)

It is important to be aware of the order these types are listed in. Overproduction is the worst type of waste and triggers the other types of waste.