Muda: One of the Best Management Ideas from the Japanese

A Japanese businessman staring outside his office window If there’s one country that exemplifies efficiency, it will be Japan. From its manufacturing to its manner of segregating waste, it always creates a system that is easy to follow and, most of all minimizes wastefulness.

Another best example of efficiency is the Toyota Production System (TPS). From it, the world learned a key concept that saves businesses thousands of dollars. It’s called muda.

What Is Muda?

For a lot of people who know a bit about TPS, muda refers to wastefulness, which is only partly true. The Japanese term also means usefulness, which implies the concept is about making the most of the resources by minimizing or avoiding wastes.

Based on TPS, muda helps eliminate seven of the biggest wastes in manufacturing, namely, waiting, over processing, defects, transporting, overproduction, motion, and inventory. The Japanese also consider the poor maximization of skills and people as a kind of waste.

Application in the Business World

Although the Japanese created muda for manufacturing, it can be modified and adapted to other types of businesses. After all, businesses tend to have a similar pattern, which is to place a lot of money on unnecessary expenses or to allocate funds poorly.

More companies are also learning to integrate muda to Six Sigma, which is a systemic approach to improving processes. This combination leads to lean Six Sigma, which hopes to eliminate wastes in organizations.

In line with the idea of muda, these organizations are also now using lean Six Sigma software, wherein automation saves the company money regarding labor and time used in analysis and data gathering.

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One of the principal reasons why companies implement muda is to increase a business’s profitability, but its benefit also extends to employees who enjoy a higher morale, knowing their performance indeed contributes to the good of the organization. Simply put, using it for your business is a win-win for everyone.