Reducing Waste in the Supply Chain

What are the processes that can reduce waste in the supply chain?

Optimized Supply Chain
Optimized Supply Chain. Getty Images

Introduction

Businesses are examining every area of their supply chain to reduce costs. Reducing waste has become a key component of any cost reduction program that is implemented. There are a number of processes that can be used in order to reduce waste in a company’s supply chain.

Product Design

Many companies are examining the design of their products to identify where the use of raw materials can be reduced or expensive materials be replaced.

Indeed many businesses are reviewing each component to identify whether it can be manufactured or purchased more cheaply. When designing product packaging options, companies are examining cheaper and less wasteful materials.

Resource Management

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 must be redesigned. Even in processes that do 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 use reuse of waste material can be expanded. Improvements in the technology of reclaiming waste material has meant that companies that previously discarded waste products now have the ability to reuse that material. As the recycling technology becomes more available the costs will inevitably fall helping more businesses with waste issues.

Improving Quality

Quality control is built into all manufacturing processes but is usually focused on the finished product rather than 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.

Interview The Employees Who Work Within Your Processes

The ultimate goal of your supply chain optimization process is to supply your customers with what those customers want, when those customers 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.  Lean manufacturing concepts and six sigma programs can be designed, launched and managed that can target the waste in your specific processes.  One the most robust waste-identification techniques involves interviewing employees who work within your specific process day-in and day-out.  

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 that 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 work stations were placed next to one another that would save him or her thirty seconds between those two production operations.  How much waste do those thirty seconds represent?  

Inventory Control

Do you know how much of any of your products you have on hand?  Are you sure?  Having 100% control of your inventory is one of the most sure fire ways to cut waste from your supply chain.  With 100% 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.

Conclusion

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 has been successful in improving company’s products as well as reducing overall costs.

This article about reducing waste in the supply chain has been updated by Gary Marion, Logistics and Supply Chain expert.

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