Cost of poor quality in manufacturing: how to cut out the losses
Cost of poor quality (COPQ) is an essential accounting formula for calculating losses from poor quality products and services.
9 essential tips to reduce waste in manufacturing
The amount of waste that your manufacturing facilities produce is related to the efficiency of your operations and, in turn, your profits. Here are different ways in which you can reduce waste that your manufacturing facilities produce.
Manufacturing wastes could mean different things in different industries.
Regardless of specific definitions, reducing waste in manufacturing translates to higher efficiency. Fortunately, we have come a long way in understanding the different types of manufacturing wastes and how to reduce them.
Lean manufacturing and perception of waste
With the introduction of lean manufacturing, the perception towards manufacturing waste management changed significantly.
Lean principles encoded the idea of eliminating waste from the process of manufacturing. The lean manufacturing principles require you to define value and then classify your processes into two depending on whether they provide value to your business and customers. This process allows you to identify and systematically reduce waste in manufacturing.
7 types of waste in lean manufacturing
Knowing and identifying the types of waste your manufacturing workflows create helps you to tackle it better.
Lean principles categorize the different types of manufacturing waste in the following way:
- Overproduction: Producing more than what is needed, simply to store it
- Waiting: Idle machines and technicians, bottlenecks in your production
- Transport: Moving parts and products multiple times
- Processing: Performing unnecessary processing steps in the production of your products
- Inventory: Overstocking supplies leads to manufacturing overheads in storage and inventory management
- Motion: Inefficient workflows and routing manufacturing lead to technicians spending energy looking for tools etc.
- Correction: Producing defective products or employing a process that produces a lot of scrap
Unrealized potential is often considered the eighth type of waste in lean. Underutilizing the skills of your workforce is probably the most important and, at the same time, the hardest form of waste to minimize.
How to reduce waste in manufacturing?
With the above classification, you can understand the kind of waste you generate the most regardless of your industry.
Of course, the specifics differ from industry to industry. For instance, waste can come from perishables expiring in the food manufacturing business. Whereas in textile and metal manufacturing, waste comes from scraps. However, mapping out your waste streams and classifying the type of waste you generate is the first step.
Once you have that clear, you can move on to the various things that you can do to reduce waste.
9 tips to reduce waste in manufacturing
Regardless of the sector, here are nine tips that outline how you can reduce the amount of waste from your manufacturing facilities.
1. Set a waste management goal
Once you have defined and understood the wastes you generate, your next step should be to set a waste management goal and commit to it.
Setting a goal can help you and your team to stay on track and assess how well your company is cutting excess waste. For instance, you could set a goal of reducing waste by 25% in the upcoming quarter. Setting a goal allows you to quantify the progress that you are making towards the goal.
This step also involves getting your entire company on board with the goal and contributing enthusiastically towards it.
Can you strive for perfection in reducing waste?
Let’s use the above example, setting a goal of reducing 25% more waste every quarter. Over four quarters, your company will have produced 100% less waste.
That is like zero waste.
If only life was that simple. Certainly, you can aim to remove every wasteful thing from your production lines. Unfortunately, it’s impossible — instead, the goal is to perfect your business value continuously.
You can read more about how to do this by checking out this article on lean manufacturing principles.
2. Minimize overstocking and overproduction
The overheads that come from overstocking and overproduction can lead to a significant waste of resources.
An effective way to combat this is by establishing a pull-based system, so you only produce products that are required by the customers. The idea is to create your system to get its raw materials and produce final products in a just-in-time fashion. Such a production system allows you to focus on making your workflows efficient and producing a high-quality product.
Forecasting and production planning capabilities offered by a manufacturing ERP, like Katana, are extremely effective in reducing this type of waste.
3. Stay on top of your inventory
Eliminating excess stock can be a tough goal to achieve.
Your workflows might often require you to maintain certain levels of stock. In such cases, the next best thing you can do is complete control of your inventory. A batch of expired products can throw off your entire production schedule and delay your orders.
An effective inventory tracking system can ensure you use your products well before they go bad.
Some live inventory management software often offers end-to-end traceability features. For instance, Katana includes purchase order management, batch tracking, and expiry date tracking features, which help you streamline your inventory management.
4. Set up a preventive maintenance schedule
Machines that break down in the middle of production add unnecessary delays in your manufacturing process and additional operating expenses in the form of repairs.
As they say, prevention is better than cure. So, a preventive maintenance schedule that allows you to perform regular maintenance activities can prevent the unexpected breakdown of your machinery — ensuring that your production process continues uninterrupted.
5. Optimize your shop floor
Imagine your shop floor not knowing about the modifications to the order that your customer requested.
In the worst case, this could mean that the product ends up in the trash, and you have to make a new one all over again. A paper-based communication system could lead to mistakes and waste like these. Or imagine a technician having to walk around the shop floor looking for a specific tool to complete a job.
This delays order fulfillment and frustrates your workforce, leading to higher attrition rates.
Having effective and fast communication on the shop floor can unlock value and prevent waste.
With the Katana Shop Floor App, you can add notes to manufacturing orders and track time spent on tasks to optimize the shop floor processes.
6. Reduce packaging
Revisiting how you pack and ship your products could lead you to reduce waste significantly as well.
For example, Apple decided not to ship only a cable but not the adapter with its iPhones, starting with the iPhone 12. This allowed it to pack the new iPhones in smaller boxes. This controversial move reduced packaging waste significantly and reportedly increased Apple’s profits by a whopping $6.5 billion.
This shows that at large volumes, even small changes could lead to immense gains in terms of profit and sustainability. So, simple tweaks like switching to recyclable materials or reducing packaging can go a long way.
7. Perform a professional waste audit
A waste audit allows you to analyze your waste streams and find different ways in which you can reduce waste.
Although you can do it yourself, an external audit can set you on a path toward obtaining green certification. So, hiring a professional waste auditing firm might be a worthwhile investment if you get green certification.
8. Invest in processes that can bring about a circular economy
There is a growing movement toward designing eco-friendly products and processes with a large focus on reuse, repair, refurbishing, and recycling. This ensures that your products have a long lifecycle, at the end of which they can be repurposed — preventing them from ending up in a landfill.
You could aim high and invest in production processes that produce zero waste and promote this idea of a circular economy.
9. Get creative
Some byproducts of your manufacturing process that you might deem a waste are probably still valuable. There could be an opportunity to repurpose waste — let’s take a look at an example.
The dairy and cheese industry used to consider whey to be a waste product up until the 1950s. Often large dairy processing plants would pay to dispose of the excess whey. Then along came whey protein, the boom of weight-lifting as a sport, and large-scale market adoption. So, what was earlier considered a waste product is now the raw material for a multi-billion dollar protein supplement industry.
ERP systems like Katana can help you reduce waste in multiple ways. With features like inventory control and end-to-end traceability, Katana can take the ick out of your journey to reduce waste. Get a 14-day free trial and find out how thousands of manufacturers use Katana to optimize their business operations.
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