Work out lean waste cost instantly with clear inputs, formula shown and shareable results.
The seven wastes fall into two costing groups: time-based wastes such as waiting, transport, motion and over-processing, valued at the loaded labour rate, and material-based wastes such as defects and excess inventory, valued at their own cost. Summing them gives a figure that justifies improvement resource.
Waste cost
Time waste cost = (waiting + transport hours) x labour rate; total = time waste + defect cost
Waiting, by a wide margin, but it is the least visible because nobody logs it. Overproduction is considered the worst waste because it generates inventory, handling and hidden defects.
It understates waste on a constrained resource, where the real cost is lost contribution, and overstates it where there is idle capacity nobody would pay to remove. State which basis you have used.