ABSTRACT
An important action by internal auditors to add value to their clients is to identify waste and inefficiency. A key component of the lean business methodology is eliminating waste. The focus in organizations should be to spend more time and resources creating value for customers by eliminating, or at least, reducing, everything else. A common methodology is the Eight Areas of Waste, which identifies: Mistakes/errors, transportation, waiting, motion, overproduction, overprocessing, excess inventory and underutilized personnel. Mistakes/Errors involve the time and materials spent doing something that has to be scrapped or fixed due to poor quality. Transportation is related to the movement of people, inventory, tools, and other items more frequently or over longer distances than necessary. Motion involves the unnecessary movement of people or items within a work area. Underutilized Personnel involves the waste of human potential. Excess Inventory involves storing products or materials that are not needed within a reasonable amount of time.
