Four ways to reduce waste in manufacturing

Those of us who operate in the manufacturing and distribution world are familiar with the “Seven Deadly Wastes” identified by Toyota’s chief engineer, Taiichi Ohno, as part of the Toyota Production System.

These seven wastes are:

1. Transportation

2. Inventory

3. Motion

4. Waiting

5. Over-process

6. Over-production

7. Defects

Manufacturers may employ lean tools, such as Kaizen Continuous Improvement, 5S, Value Stream Mapping or Six Sigma to eliminate unnecessary waste and reduce necessary waste required for their operations.

However, implementing these tools requires resources and dedication over an extended period of time. While beginning use of one of these tools may ultimately be the best answer for your company, simple solutions may be implemented immediately to jump-start your waste reduction.

1. Preventative maintenance schedule

The waste of motion refers to the unnecessary movement of people or equipment and the related damage caused by that action on the person or equipment. Any motion, necessary or not, causes wear or tear on equipment.

A simple, but often overlooked, tool is a preventive maintenance schedule. Wear and tear is normal in a manufacturing process. However, not performing regular maintenance, just as you would on your car, will result in wasted dollars and time down the road.

It is easier to proactively budget and control costs, including labor hours, versus reacting to a situation that is out of your control. Reacting can result in unnecessary overtime, as well as potentially increased shipping costs to expedite delivery. Fixing a defect is often more expensive than preventing the defect in the first place. There are numerous preventive maintenance programs available. A simple checklist may be all you need.

2. Parts and supply management

Inventory waste refers not only to the cost of excess inventory, but also to the related costs to finance, store and handle the inventory.

While your company’s parts and supplies inventory is often small dollars compared to the cost of your raw materials, the cost of carrying an overabundance of supplies can get out of control and could result in waste, especially if product or packaging requirements change.

Employing measures used for controlling raw materials, such as determining your optimal on-hand requirements, defining lead times and establishing recommended re-order points, can reduce waste in parts and supplies.

Often, this can be achieved by simply adding parts and supplies to your inventory system. While these dollars may be relatively small in comparison, having too many parts and supplies can clutter the warehouse, which leads to both transportation and motion waste.

3. Location identification

When is the last time you walked the warehouse floor? Were locations clearly marked for inventory, supplies, tools and other items key to the manufacturing process?

As time passes, a once well-marked and organized warehouse becomes faded, outdated or nonexistent.

For long-time employees, this may not pose a problem. But for temporary workers or new hires, not having clearly marked floors and racks could increase search time for the correct raw material. This could result in incorrect finished goods being shipped to customers (leading to additional hidden costs for rework or lost customers) or increasing the time spent searching for just the right tool needed for the repair.

Repainting lines on the floor and replacing location tags are fairly simple but important tasks. While you are at it, consider the location of the various raw materials and finished goods. Is it time to shift these items around in the warehouse to improve the material flow?

4. Sorting of waste

Rather than participating in a full-blown “dumpster dive” or “dumpster audit,” as commonly referred to by lean experts, start by simply placing bins in strategic locations around your facility, clearly marked for the type of waste being thrown away.

By sorting the waste, you will ensure that all items that can easily be recycled are indeed getting to the right place. Assign someone the responsibility of monitoring the bins, focusing on the fullest bins. Then challenge them to find a solution for eliminating, reducing or reusing this waste.

Possibly the simplest solution is to ask the people on the warehouse floor. These folks are handling waste and dealing with the effects of waste every day.

Start by asking them how and where waste is generated. Not only will you identify waste and possible solutions to your problem, you will empower your people to think more like owners. Provide incentives for this kind of problem-solving, and you might just be surprised by the results! – Joann Brumsey, CPA, Wall, Einhorn & Chernitzer, P.C., a member of CPAmerica International