In difficult economic times, waste is the last thing an organization wants to see in their supply chain. Instead, many logistics companies are turning to Lean Thinking as it promises to reduce costs, improve quality and transform the bottom line, by eliminating waste in every area of the value stream.
Here, we will identify the eight wastes of manufacturing and how Asset Management solutions can eradicate these wastes.
1. Over-Production: Producing More Than is Needed.
The result of producing to forecast demand or supposed economic batches, it is visible as excessive, time consuming and costly material stores. This type of waste costs money, creates inventory and increases effort hours.
Causes for over-production are:
- Faulty process flows
- Ineffective forecasting techniques
- Lack of production schedule design/adherence
- Instituting a Just-in-Time model of production removes over-production.
- Production schedules aligned with customer demands, thereby reducing inventory costs and waiting times.
2. Waiting: Time Wasted for the Process Step to be Completed.
Waiting occurs when someone in the process chain waits to take the next action in the process. Whether for the previous, current or next step in the process, the result is wasted worker time. This waste causes bottlenecks in workflow, can lead to service failures, and adds time to process/product completion. The goal is to maximize the utilization and / or efficiency of operatives first and machines second.
Some of the causes for waiting are:
- Machinery or system downtime
- Faulty resource planning
- Unplanned work allocation
- Insufficient workforce
- Faulty communication techniques
- Effective planning for workforce requirements and effective people management practices reduce waiting times.
- Any form of downtime is a waste and costs money to the organization.
- Effective machinery maintenance systems coupled with well-defined issue resolution process reduce wastes.
3. Transportation: Unnecessary Movement of Material, Product, or Goods.
This waste is often associated with damage of product during transit, increased production time, increased transportation costs and taking up more floor space than needed. Unnecessary transport of materials, WIP (work in progress) and finished goods adds zero value to the product. Instead of improving transportation processes and systems, lean thinking first favors minimizing or eliminating them.
Reasons for Transportation wastes could be:
- Faulty factory or office lay-out
- Poor machinery set-up and design
- Lack of seamless flow between processes, upstream and downstream
- Avoid transportation wastes through seamless flow of inputs from upstream to downstream processes.
- Efficient hand-offs and minimal back and forth process steps help reduce this.
- Simplify layout designs by reviewing the same through an input-process-output (IPO) technique.
- Use simple lean tools like spaghetti and swim-lane charts.
4. Over-Processing: Doing More Than is Required.
Same as over-production, over-processing relates to internal processes rather than customer demand. Over-processing relates to performing more work than is necessary, according to the ‘value’ principle — often due to poor plant layout or misguided attempts to recover expensive machinery costs. This waste consumes resources, time and inhibits our ability to address other vital customer tasks. Lean essentially advocates using simpler, lower cost tools, cell manufacturing and / or combining steps, where possible.
Causes of Over-Processing are:
- Excessive reporting
- Duplicate entry of data at various stages
- Back and forth flow of queries related to the same documents
- Re-work caused by human errors.
- Simplifying and standardizing processes is the key mitigating factor.
- Flow-charting and value stream mapping identify non-value add steps within the process.
- Upon removal of nonvalue added steps, cycle times reduce.
5. Motion:Unnecessary Movements of People.
Unwanted movement of tools or employees results in Motion wastes. Faulty office/factory layout and misplaced tools and resources also cause motion wastes relating to people bending, stretching or walking too far, due primarily to the inappropriate location (and potentially also design) of tools, parts inventories and fixtures. This waste increases completion times and increases likelihood of injuries. Addressing this aspect of logistics quality requires trained industrial engineers to design layouts and process flows to minimize movement.
- An effective and planned production layout removes motion waste.
- Focus on minimizing employee movement.
- Ensure that the requisite tools and resources are available and within reach.
6. Excess Inventory: WIP (work in process) being completed before it is needed.
Added product eats up available space, has a greater chance of being damaged, can become expired before using, and adds carrying costs. This waste also creates additional waste in the form of increased lead-times, excessive floor space requirements, extra handling, high interest charges, avoidable people movement and paperwork and, again, the associated costs. Inventory costs money – storage, safety, upkeep and recording. For perishable goods, the scenario will be much more critical.
Causes for inventory waste are:
- Faulty demand forecasting techniques
- Bottlenecks within the end-to-end process flow
- More emphasis on push techniques of production
- Ineffective monitoring systems
- Faulty supplier/vendor management
- Some ways to reduce inventory is to lay down more emphasis on pull techniques of production in which downstream processes produce as per the demand from upstream processes.
- Lay down effective monitoring mechanisms.
- Identify bottlenecks within the process and fix the same to reduce inventory.
7. Defects: Errors Made on Daily Tasks, Creating Defective Parts, or Anything Else That Creates Rework.
Every organization fears this word – Defects! Producing defective parts or products results in rework and scrap and invariably adds significantly to manufacturing costs. Logistics quality depends on doing it right the first time. It is not possible to remove defects in entirety. Identifying the cause for defects is the key.
Usual causes are:
- Low quality of documented procedures
- Ineffective training plans
- Lack of robust system controls
- Weak quality control mechanisms
- Substandard inputs
- Designing standard operating procedures help reduce defects.
- On-going training and assessment of employees is essential.
- Robust quality control mechanisms and effective people management practices further help reduce defects.
8. Intellect: Under-utilization of Skills.
The key to the success of any organization are its people. Look to hire the best and brightest and invest in people tends to generate multifold returns, unlike any other resource. You want a workforce that seeks self-improvement and thrives to achieve quality output for customers.
- The best ideas usually come from the ones who do the job on a daily basis – which are the employees.
- Ask them for ideas to improve a product or service.
- Chances are they would come with the pain-points that they face.
- Also, suggest alternatives to resolve the same.
The FLEX Logistics Team is Here to Help!
How do you find this waste in logistics operations or any aspect of your business? The easiest way is to simply go to areas of concern and just observe. Bring a pad and pencil along with a list of the types of wastes. See how many of the wastes you can identify then develop an action plan for resolution. To take an even deeper dive, develop a process flow map that identifies value added and non-value added steps in a process. Try to eliminate as many of the non-value added steps as possible.
Our team understands the importance of getting your products to the market. That is why we aim to understand your business and build lasting relationships with you and your team. Whether you are looking to add a new warehouse to your existing operations, growing and need to increase your distribution efforts, or starting a new company, FLEX has the solutions to meet your supply chain needs.
Contact us today to discuss your current and future warehousing and logistics needs. We will work together with you to understand your requirements and develop a solution that will set you up for future success.