Waste Not, Want Not…and Improve Your Bottom Line

As the English proverb goes, “waste not, want not” – if we don’t waste what we have, we will not want for it later. Put in a business context, if we use our resources wisely today, we should get more out of them and make more money. Manufacturing operations often are laden with waste – activities that absorb resources (materials, time, and human effort) but add little or no value. Customers will not pay for waste, so why not eliminate it from your company’s processes?

Let’s review some of Toyota’s “seven wastes of manufacturing,” which are at the heart of any “lean” initiative, and identify ways to boost your bottom line.

Overproduction is the “build-it-and-someone-will-buy-it” approach employed to optimize utilization and reduce unit costs. It leads to unnecessary or excess inventory and higher storage costs. Unnecessary inventory can also result from raw materials being stockpiled just in case they are needed and work-in-process inventory waiting for the next step to be performed – all of which ties up working capital for long periods. Backing off the production throttle a bit and moving more toward a just-in-time system can help reduce these costs.

Waiting occurs when goods are not being moved or processed, which can be the result of improper lead times along the process, machinery downtime or changeover issues. Transporting involves the movement of product between processes (or worse, moving unrelated product that is in the way or unneeded), while excess motion refers to people or equipment moving more than necessary throughout the production process.

These wastes can be alleviated by adopting a cellular layout rather than a traditional department layout at the manufacturing facility – all the resources used to manufacture a product are grouped together in the same area. A cellular layout accommodates a single-piece flow process which in turn helps keep inventory levels down. Better plant layout and design will also help reduce overprocessing and defects.

Another effective way to eliminate waste (and particularly useful in setting up manufacturing cells) is the adoption of the “Five S” system of workplace organization:

  1. Sort: Keep only what is needed. Have nothing else in the way.
  2. Set in order: Identify the best location for everything needed and clearly mark the areas. Anyone should be able to find anything in 30 seconds or less.
  3. Shine: Clean, keep work areas clutter-free, and keep up-to-date on routine maintenance.
  4. Standardize: Create rules to help maintain the first three S’s.
  5. Sustain: Stick to these rules.

Identifying wastes in your manufacturing process and implementing steps to reduce or eliminate them over time will lead to fewer defects, higher customer and employee satisfaction, and, ultimately, higher profits.

 

Michael A. Coakley can be reached at Email or 215.441.4600.