Lay Waste to Waste for Big-time Savings

Target Audience: Manufacturing and Development Companies, M&D Industry, Management Personnel, Strategic Decision Makers, Accounting & Consulting Firm Interest, Cost Savings Analyzers, Interest in Reducing Waste

It’s expensive, it may be hidden and it’s probably leeching profits from your business. It’s waste, and you can control it. Even small changes, such as using timers or sensors on lights or getting vendors to reclaim the pallets they use to ship you parts, can add up to significant savings. For truly remarkable results, though, you may need to think bigger.

Toyota, an acknowledged leader in eliminating waste, has identified seven ways in which manufacturers are most likely to be wasteful. They are:

1. Overproduction, which results in extra inventory, overhead, paperwork and space requirements,
2. Waiting time, when employees and products spend more time waiting than in production,
3. Transportation, which can mean materials are overhandled,
4. Processing, or using large, complicated machines that encourage overproduction to recover their high costs,
5. Inventory, which may hide production floor problems as well as increase lead times and create additional handling and storage costs,
6. Motion, which requires employees to move more than necessary, causing fatigue and lowering productivity, and
7. Product defects, which directly affect the bottom line through scrap, rework, reinspection and other costs associated with redoing work.

Each of these waste types requires a different approach to correct, but all can be decreased or eliminated if you’re determined.

Some of the fixes won’t be easy. For example, to reduce transportation, waiting and motion waste, you may need to reconfigure your shop floor. And some won’t be cheap. To reduce processing waste, for instance, you may have to buy smaller, more flexible equipment.

Don’t let such considerations put waste reduction on the sidelines permanently, though. Reducing waste represents a huge opportunity to boost your bottom line. If you can’t do everything at once, make waste reduction a part of your strategic planning. It’s a long-term investment that’s worthy of long-term thinking.

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