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3. Transportation is a cost with no added value. In addition, each time a
product is moved it stands the risk of being damaged, lost, and delayed.
Transportation does not transform the product in any way that the consumer is
willing to pay for.

4. Waiting refers to both the time spent by the workers waiting for
resources to arrive, the queue for their products to empty as well as the capital
sunk in goods and services that are not yet delivered to the customer. It is often
the case that there are processes to manage this waiting.
5. Inventory in the form of raw materials, work-in-progress, or finished
goods represents a capital outlay that has not yet produced an income either by the
producer or for the consumer. Any of these three items not being actively
processed to add value is waste.
6. Motion refers to the actions performed by the producer, worker, or
equipment. Motion has significance to damage, wear, and safety. It also includes
the fixed assets and expenses incurred in the production process.
7. Overprocessing is defined as using a more expensive or otherwise
valuable resource than is needed for the task or adding features that are designed
for but unneeded by the customer. There is a particular problem with this item
regarding people. People may need to perform tasks that they are overqualified for
to maintain their competency. This training cost can be used to offset the waste
associated with overprocessing.
The Five Core Principles of Lean
Lean methodologies are lean because they enable a business to do more with
less. A lean organization uses less human effort, less equipment, less facilities space,
less time, and less capital—while always coming closer to meeting customers’ exact
needs. Therefore, lean is not just another cost-cutting program of the kind we often
see in business organizations. Lean is much more about the conservation of valuable
resources than it is about cost cutting.
In their best-selling book, Lean Thinking, James Womack and Daniel Jones
[4]
identified five core principles of lean. Let’s examine them one by one.
Define Value from the Customer’s Perspective
The first core principle in the Womack/Jones lean framework is that value must
be defined and specified from the customer’s perspective. While this seems simple
enough, it requires much more than high-sounding, generic statements. To be
meaningful, value must be defined in terms of specific products. This means that
managers must understand how each specific product meets the needs of specific
customers at a specific price and at a specific time.
Describe the Value Stream for Each Product or Service
The second core principle of lean is to describe the value stream for each
product or service (or, in some cases, for groups or families of similar products). The
value stream is the set of activities that the business is performing to bring a finished
product to a customer. It includes both direct manufacturing activities and indirect
activities such as order processing, purchasing, and materials management.
Developing a detailed description or map of each value stream usually reveals huge
amounts of waste. It enables managers to identify which value stream activities add

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