Six Big Losses

The “Six Big Losses” are crucial categories that lead to production inefficiencies in manufacturing. They encompass equipment failure, setup time, idling, reduced speed, process defects, and yield loss. Addressing these losses enhances efficiency, output, and quality, but challenges like data collection and process changes must be overcome. Examples illustrate their impact on operations.

Introduction to the Six Big Losses

The Six Big Losses is a framework that categorizes and addresses common sources of inefficiency and productivity loss in manufacturing environments. Originally developed as part of the Total Productive Maintenance (TPM) approach, this framework has been adopted by lean manufacturing and other process improvement methodologies.

The Six Big Losses are typically presented as six categories, each representing a specific type of loss that can occur in a manufacturing setting. These losses are:

  1. Downtime Loss: This category encompasses any unplanned or planned downtime during production. Unplanned downtime can result from equipment breakdowns, while planned downtime may occur for maintenance or changeovers.
  2. Speed Loss: Speed loss refers to the difference between the ideal cycle time and the actual cycle time of a process. It can result from various factors, including suboptimal equipment performance or operator inefficiency.
  3. Defect Loss: Defect loss involves the production of defective or non-conforming products. These defects may require rework or lead to scrap, increasing production costs and reducing overall quality.
  4. Start-Up/Changeover Loss: This category covers the time and resources required to change over equipment or processes from one product or operation to another. Longer changeover times can disrupt production flow and reduce overall efficiency.
  5. Idling/Minor Stoppages Loss: Idling or minor stoppages refer to brief interruptions in production that are not categorized as full downtime events. These interruptions can add up over time, affecting overall equipment effectiveness (OEE).
  6. Reduced Yield Loss: Reduced yield loss occurs when a process or machine produces fewer units than expected due to factors such as underperformance, suboptimal settings, or materials waste.

Impact of the Six Big Losses

Understanding the impact of the Six Big Losses is crucial for manufacturers looking to improve their operations. Here’s how each loss category can affect manufacturing performance:

Downtime Loss

  • Reduced Output: Downtime directly translates to reduced production output, which can lead to missed deadlines and customer dissatisfaction.
  • Maintenance Costs: Frequent equipment breakdowns and unplanned maintenance increase maintenance costs and reduce profitability.
  • Resource Allocation: Valuable resources such as labor and materials are wasted during downtime events.

Speed Loss

  • Inefficiency: Speed loss indicates inefficiencies in the production process, which can result in longer lead times and increased operating costs.
  • Missed Opportunities: Slow processes can hinder an organization’s ability to respond to market demands and capitalize on business opportunities.

Defect Loss

  • Quality Issues: Defects can damage a company’s reputation and erode customer trust, leading to potential revenue loss.
  • Rework Costs: Addressing defects through rework consumes additional time and resources, driving up production costs.

Start-Up/Changeover Loss

  • Production Delays: Lengthy changeovers can cause production delays, negatively impacting customer deliveries and inventory management.
  • Resource Allocation: The time and labor required for changeovers may be better utilized elsewhere.

Idling/Minor Stoppages Loss

  • Cumulative Impact: Frequent minor stoppages, although individually brief, can accumulate to a significant loss of production time over time.
  • Productivity Loss: Operators may become frustrated and demotivated by frequent interruptions, affecting overall productivity.

Reduced Yield Loss

  • Higher Costs: Producing fewer units than planned increases the per-unit production cost, affecting profitability.
  • Resource Waste: Materials, labor, and machine time are wasted when production yields are lower than expected.

Strategies for Mitigating the Six Big Losses

Addressing the Six Big Losses is crucial for achieving operational excellence in manufacturing. Here are strategies to mitigate each loss category:

Downtime Loss

  • Predictive Maintenance: Implement predictive maintenance programs to anticipate and prevent equipment breakdowns.
  • Reduced Changeover Times: Invest in quick-changeover techniques to minimize planned downtime during changeovers.
  • Root Cause Analysis: Conduct thorough root cause analyses to identify and eliminate recurring causes of downtime.

Speed Loss

  • Standard Work Procedures: Develop and follow standardized work procedures to optimize processes and reduce variations.
  • Training and Skills Development: Invest in training and skill development programs for operators to improve efficiency.
  • Process Automation: Explore automation opportunities to streamline operations and reduce manual intervention.

Defect Loss

  • Quality Control: Implement robust quality control measures and continuous improvement programs.
  • Error-Proofing (Poka-Yoke): Use error-proofing techniques to prevent defects from occurring in the first place.
  • Employee Involvement: Engage employees in quality improvement initiatives to harness their expertise and insights.

Start-Up/Changeover Loss

  • SMED (Single-Minute Exchange of Die): Apply SMED principles to reduce changeover times and increase production flexibility.
  • Schedule Optimization: Plan changeovers strategically to minimize their impact on production schedules.
  • Standard Work: Develop standardized work procedures for changeovers to ensure consistency and efficiency.

Idling/Minor Stoppages Loss

  • Real-Time Monitoring: Implement real-time monitoring systems to detect and address minor stoppages promptly.
  • Operator Training: Train operators to address minor issues independently and troubleshoot effectively.
  • Visual Management: Use visual management tools to make minor stoppages more visible and easier to address.

Reduced Yield Loss

  • Process Optimization: Continuously analyze and optimize processes to improve yield rates.
  • Materials Management: Implement inventory control and materials management practices to reduce waste.
  • Quality Assurance: Enhance quality assurance processes to minimize material and product waste.

Real-World Examples of Six Big Loss Mitigation

  1. Automotive Manufacturing: Automotive manufacturers use predictive maintenance technologies to reduce downtime associated with equipment failures. They also employ SMED techniques to minimize changeover times during production line reconfigurations.
  2. Food Processing: Food processing facilities focus on quality control to minimize defect losses. They implement strict quality assurance measures and invest in employee training to maintain high-quality standards.
  3. Pharmaceutical Industry: Pharmaceutical companies adopt real-time monitoring systems to detect and address minor stoppages on production lines. They also optimize processes to improve yield rates and reduce waste.

Key Highlights

  • Equipment Failure: Downtime caused by breakdowns and maintenance impacts production.
  • Setup Time: The time spent preparing equipment for production and changing setups.
  • Idling and Minor Stops: Short pauses accumulate and hinder continuous flow.
  • Reduced Speed: Operating below maximum speed reduces output efficiency.
  • Process Defects: Errors and defects lead to rework, waste, and decreased quality.
  • Yield Loss: Wasted materials and rejected products lower overall yield.
  • Advantages: Addressing these losses boosts productivity, quality, and cost-effectiveness.
  • Challenges: Ensuring accurate data collection, effective process adjustments, and optimal resource allocation.
  • Examples: Toyota’s “Lean” methodology tackles these losses for streamlined operations, setting an industry benchmark.

Connected Agile & Lean Frameworks


AIOps is the application of artificial intelligence to IT operations. It has become particularly useful for modern IT management in hybridized, distributed, and dynamic environments. AIOps has become a key operational component of modern digital-based organizations, built around software and algorithms.


AgileSHIFT is a framework that prepares individuals for transformational change by creating a culture of agility.

Agile Methodology

Agile started as a lightweight development method compared to heavyweight software development, which is the core paradigm of the previous decades of software development. By 2001 the Manifesto for Agile Software Development was born as a set of principles that defined the new paradigm for software development as a continuous iteration. This would also influence the way of doing business.

Agile Program Management

Agile Program Management is a means of managing, planning, and coordinating interrelated work in such a way that value delivery is emphasized for all key stakeholders. Agile Program Management (AgilePgM) is a disciplined yet flexible agile approach to managing transformational change within an organization.

Agile Project Management

Agile project management (APM) is a strategy that breaks large projects into smaller, more manageable tasks. In the APM methodology, each project is completed in small sections – often referred to as iterations. Each iteration is completed according to its project life cycle, beginning with the initial design and progressing to testing and then quality assurance.

Agile Modeling

Agile Modeling (AM) is a methodology for modeling and documenting software-based systems. Agile Modeling is critical to the rapid and continuous delivery of software. It is a collection of values, principles, and practices that guide effective, lightweight software modeling.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

Agile Leadership

Agile leadership is the embodiment of agile manifesto principles by a manager or management team. Agile leadership impacts two important levels of a business. The structural level defines the roles, responsibilities, and key performance indicators. The behavioral level describes the actions leaders exhibit to others based on agile principles. 

Andon System

The andon system alerts managerial, maintenance, or other staff of a production process problem. The alert itself can be activated manually with a button or pull cord, but it can also be activated automatically by production equipment. Most Andon boards utilize three colored lights similar to a traffic signal: green (no errors), yellow or amber (problem identified, or quality check needed), and red (production stopped due to unidentified issue).

Bimodal Portfolio Management

Bimodal Portfolio Management (BimodalPfM) helps an organization manage both agile and traditional portfolios concurrently. Bimodal Portfolio Management – sometimes referred to as bimodal development – was coined by research and advisory company Gartner. The firm argued that many agile organizations still needed to run some aspects of their operations using traditional delivery models.

Business Innovation Matrix

Business innovation is about creating new opportunities for an organization to reinvent its core offerings, revenue streams, and enhance the value proposition for existing or new customers, thus renewing its whole business model. Business innovation springs by understanding the structure of the market, thus adapting or anticipating those changes.

Business Model Innovation

Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Constructive Disruption

A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Continuous Innovation

That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Design Sprint

A design sprint is a proven five-day process where critical business questions are answered through speedy design and prototyping, focusing on the end-user. A design sprint starts with a weekly challenge that should finish with a prototype, test at the end, and therefore a lesson learned to be iterated.

Design Thinking

Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.


DevOps refers to a series of practices performed to perform automated software development processes. It is a conjugation of the term “development” and “operations” to emphasize how functions integrate across IT teams. DevOps strategies promote seamless building, testing, and deployment of products. It aims to bridge a gap between development and operations teams to streamline the development altogether.

Dual Track Agile

Product discovery is a critical part of agile methodologies, as its aim is to ensure that products customers love are built. Product discovery involves learning through a raft of methods, including design thinking, lean start-up, and A/B testing to name a few. Dual Track Agile is an agile methodology containing two separate tracks: the “discovery” track and the “delivery” track.

eXtreme Programming

eXtreme Programming was developed in the late 1990s by Ken Beck, Ron Jeffries, and Ward Cunningham. During this time, the trio was working on the Chrysler Comprehensive Compensation System (C3) to help manage the company payroll system. eXtreme Programming (XP) is a software development methodology. It is designed to improve software quality and the ability of software to adapt to changing customer needs.

Feature-Driven Development

Feature-Driven Development is a pragmatic software process that is client and architecture-centric. Feature-Driven Development (FDD) is an agile software development model that organizes workflow according to which features need to be developed next.

Gemba Walk

A Gemba Walk is a fundamental component of lean management. It describes the personal observation of work to learn more about it. Gemba is a Japanese word that loosely translates as “the real place”, or in business, “the place where value is created”. The Gemba Walk as a concept was created by Taiichi Ohno, the father of the Toyota Production System of lean manufacturing. Ohno wanted to encourage management executives to leave their offices and see where the real work happened. This, he hoped, would build relationships between employees with vastly different skillsets and build trust.

GIST Planning

GIST Planning is a relatively easy and lightweight agile approach to product planning that favors autonomous working. GIST Planning is a lean and agile methodology that was created by former Google product manager Itamar Gilad. GIST Planning seeks to address this situation by creating lightweight plans that are responsive and adaptable to change. GIST Planning also improves team velocity, autonomy, and alignment by reducing the pervasive influence of management. It consists of four blocks: goals, ideas, step-projects, and tasks.

ICE Scoring

The ICE Scoring Model is an agile methodology that prioritizes features using data according to three components: impact, confidence, and ease of implementation. The ICE Scoring Model was initially created by author and growth expert Sean Ellis to help companies expand. Today, the model is broadly used to prioritize projects, features, initiatives, and rollouts. It is ideally suited for early-stage product development where there is a continuous flow of ideas and momentum must be maintained.

Innovation Funnel

An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Innovation Matrix

According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Innovation Theory

The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Lean vs. Agile

The Agile methodology has been primarily thought of for software development (and other business disciplines have also adopted it). Lean thinking is a process improvement technique where teams prioritize the value streams to improve it continuously. Both methodologies look at the customer as the key driver to improvement and waste reduction. Both methodologies look at improvement as something continuous.

Lean Startup

A startup company is a high-tech business that tries to build a scalable business model in tech-driven industries. A startup company usually follows a lean methodology, where continuous innovation, driven by built-in viral loops is the rule. Thus, driving growth and building network effects as a consequence of this strategy.

Minimum Viable Product

As pointed out by Eric Ries, a minimum viable product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort through a cycle of build, measure, learn; that is the foundation of the lean startup methodology.

Leaner MVP

A leaner MVP is the evolution of the MPV approach. Where the market risk is validated before anything else


Kanban is a lean manufacturing framework first developed by Toyota in the late 1940s. The Kanban framework is a means of visualizing work as it moves through identifying potential bottlenecks. It does that through a process called just-in-time (JIT) manufacturing to optimize engineering processes, speed up manufacturing products, and improve the go-to-market strategy.


Jidoka was first used in 1896 by Sakichi Toyoda, who invented a textile loom that would stop automatically when it encountered a defective thread. Jidoka is a Japanese term used in lean manufacturing. The term describes a scenario where machines cease operating without human intervention when a problem or defect is discovered.

PDCA Cycle

The PDCA (Plan-Do-Check-Act) cycle was first proposed by American physicist and engineer Walter A. Shewhart in the 1920s. The PDCA cycle is a continuous process and product improvement method and an essential component of the lean manufacturing philosophy.

Rational Unified Process

Rational unified process (RUP) is an agile software development methodology that breaks the project life cycle down into four distinct phases.

Rapid Application Development

RAD was first introduced by author and consultant James Martin in 1991. Martin recognized and then took advantage of the endless malleability of software in designing development models. Rapid Application Development (RAD) is a methodology focusing on delivering rapidly through continuous feedback and frequent iterations.

Retrospective Analysis

Retrospective analyses are held after a project to determine what worked well and what did not. They are also conducted at the end of an iteration in Agile project management. Agile practitioners call these meetings retrospectives or retros. They are an effective way to check the pulse of a project team, reflect on the work performed to date, and reach a consensus on how to tackle the next sprint cycle. These are the five stages of a retrospective analysis for effective Agile project management: set the stage, gather the data, generate insights, decide on the next steps, and close the retrospective.

Scaled Agile

Scaled Agile Lean Development (ScALeD) helps businesses discover a balanced approach to agile transition and scaling questions. The ScALed approach helps businesses successfully respond to change. Inspired by a combination of lean and agile values, ScALed is practitioner-based and can be completed through various agile frameworks and practices.


The SMED (single minute exchange of die) method is a lean production framework to reduce waste and increase production efficiency. The SMED method is a framework for reducing the time associated with completing an equipment changeover.

Spotify Model

The Spotify Model is an autonomous approach to scaling agile, focusing on culture communication, accountability, and quality. The Spotify model was first recognized in 2012 after Henrik Kniberg, and Anders Ivarsson released a white paper detailing how streaming company Spotify approached agility. Therefore, the Spotify model represents an evolution of agile.

Test-Driven Development

As the name suggests, TDD is a test-driven technique for delivering high-quality software rapidly and sustainably. It is an iterative approach based on the idea that a failing test should be written before any code for a feature or function is written. Test-Driven Development (TDD) is an approach to software development that relies on very short development cycles.


Timeboxing is a simple yet powerful time-management technique for improving productivity. Timeboxing describes the process of proactively scheduling a block of time to spend on a task in the future. It was first described by author James Martin in a book about agile software development.


Scrum is a methodology co-created by Ken Schwaber and Jeff Sutherland for effective team collaboration on complex products. Scrum was primarily thought for software development projects to deliver new software capability every 2-4 weeks. It is a sub-group of agile also used in project management to improve startups’ productivity.


Scrumban is a project management framework that is a hybrid of two popular agile methodologies: Scrum and Kanban. Scrumban is a popular approach to helping businesses focus on the right strategic tasks while simultaneously strengthening their processes.

Scrum Anti-Patterns

Scrum anti-patterns describe any attractive, easy-to-implement solution that ultimately makes a problem worse. Therefore, these are the practice not to follow to prevent issues from emerging. Some classic examples of scrum anti-patterns comprise absent product owners, pre-assigned tickets (making individuals work in isolation), and discounting retrospectives (where review meetings are not useful to really make improvements).

Scrum At Scale

Scrum at Scale (Scrum@Scale) is a framework that Scrum teams use to address complex problems and deliver high-value products. Scrum at Scale was created through a joint venture between the Scrum Alliance and Scrum Inc. The joint venture was overseen by Jeff Sutherland, a co-creator of Scrum and one of the principal authors of the Agile Manifesto.

Six Sigma

Six Sigma is a data-driven approach and methodology for eliminating errors or defects in a product, service, or process. Six Sigma was developed by Motorola as a management approach based on quality fundamentals in the early 1980s. A decade later, it was popularized by General Electric who estimated that the methodology saved them $12 billion in the first five years of operation.

Stretch Objectives

Stretch objectives describe any task an agile team plans to complete without expressly committing to do so. Teams incorporate stretch objectives during a Sprint or Program Increment (PI) as part of Scaled Agile. They are used when the agile team is unsure of its capacity to attain an objective. Therefore, stretch objectives are instead outcomes that, while extremely desirable, are not the difference between the success or failure of each sprint.

Toyota Production System

The Toyota Production System (TPS) is an early form of lean manufacturing created by auto-manufacturer Toyota. Created by the Toyota Motor Corporation in the 1940s and 50s, the Toyota Production System seeks to manufacture vehicles ordered by customers most quickly and efficiently possible.

Total Quality Management

The Total Quality Management (TQM) framework is a technique based on the premise that employees continuously work on their ability to provide value to customers. Importantly, the word “total” means that all employees are involved in the process – regardless of whether they work in development, production, or fulfillment.


The waterfall model was first described by Herbert D. Benington in 1956 during a presentation about the software used in radar imaging during the Cold War. Since there were no knowledge-based, creative software development strategies at the time, the waterfall method became standard practice. The waterfall model is a linear and sequential project management framework. 

Read Also: Continuous InnovationAgile MethodologyLean StartupBusiness Model InnovationProject Management.

Read Next: Agile Methodology, Lean Methodology, Agile Project Management, Scrum, Kanban, Six Sigma.

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