Reducing Waste in the Supply Chain
Processes That Can Help
Businesses examine every area of their supply chains to reduce costs. Reducing waste is a key component of any cost-reduction program that is implemented, and there are a number of processes that can be used to do so.
When companies are considering waste minimization programs, they will find that some costs will be required in the implementation. However, as those programs come online, the reduction in waste will produce cost savings greater than the initial investment. The implementation of waste minimization programs can be successful in improving a company’s products as well as reducing overall costs.
Many companies examine the designs of their products to identify where the use of raw materials can be reduced or expensive materials be replaced. Indeed, many businesses review each component to identify whether it can be manufactured or purchased for less money. When designing product packaging options, companies consider cheaper and less wasteful materials.
Each production process should be examined to minimize the waste of raw materials. In manufacturing operations, processes that waste material that cannot be recycled or reused should be redesigned. Even processes that produce waste that can be recycled should be examined due to the costs in recycling processes.
Use of Scrap Material
As well as minimizing the waste of raw materials in manufacturing processes, the reuse of waste material can be expanded. Improvements in the technology of reclaiming waste material have meant that companies that previously discarded waste products now have the ability to reuse that material. As recycling technology becomes more accessible, the costs inevitably will fall, helping more businesses with waste issues.
Quality control is built into all manufacturing processes, but it usually is focused on the finished product rather than on minimizing waste. Quality management should include the goal of minimizing the waste of raw materials as well as producing a quality product. Improving the overall quality of a company’s manufacturing process will reduce waste overall as it will increase the quantity of finished goods that pass quality inspection.
The ultimate goal of your supply chain optimization process is to supply your customers with what they want, when they want it—and to accomplish that by spending as little money as possible. One critical factor in spending as little money as possible is to eliminate as much as you can from the process. One of the most effective waste-identification techniques involves interviewing employees who work within your specific processes every day.
The targets of improve product design, resource management, quality improvement, and the usage of scrap metal should be thought through after a thorough and detailed investigation that includes the input of front-line employees. It's these employees who see the processes that management may only know as an on-time delivery or efficiency metric. An employee on the shop floor, for example, may be able to tell you that if two workstations were placed next to one another, that would save him or her 30 seconds between those two production operations. Those 30 seconds repeated multiple times over the course of a day can add up to significant time.
Do you know how much of any of your products you have on hand? Are you sure? Having 100 percent control of your inventory is one of the most sure-fire ways to cut waste from your supply chain. With 100 percent inventory control, you can ensure that you're not making or ordering products when you might already have them on hand. Implement cycle counting and physical inventories today if you haven't done so already.