A cornerstone of continuous improvement is the concept of value added and that anything in an organization or process that is not value added is considered waste. This chapter covers the concepts of value added and waste, kinds of wastes, and the guiding principles behind lean production. To distinguish value-added from nonvalue-added activities, it is useful to think of an organization as comprised of two organizations: the production organization and the support organization. Employee involvement and empowerment, a cornerstone of lean production, acknowledges that each employee's potential contribution vastly outstrips the confinements of traditional job descriptions. A goal of lean production is to identify and eliminate waste. This is done through adherence to a set of eight guiding lean principles. These are: defects, overproduction, waiting, nonutilized human talent, transportation, inventory, motion, and excess processing. The chapter concludes with a discussion of lean production philosophy, perceived limitations, and implementation issues.