In: Operations Management
Businesses or industries make their own arrangement for the collection of wastes, their treatment, and their disposal. Wastes are something that does not have any values in the eye of the consumer and who doesn't want to pay for it. It is something that utilizes resources to the production activity but does not add any value to the customer which leads to reduce the profit of the manufacturer. Eliminating waste is very important to cut costs and improve efficiency which can result in increased customer engagement by increasing profits.
Types of waste in an organization are categories into :
1) Inventory: Over purchasing and storing materials and waiting for future processes can cause waste. So do not store extra material as it holds costs and causes waste. Purchase material only when needed can avoid the problem.
2) Transport: Transport is a movement of material from one place to another. It is an unnecessary movement of goods or material. Unnecessary transport during work progress causes damages to the materials and also increases cycle time in the production thus it is waste. Poor plant design, multiple storage facilities with poorly design production systems along with long material handling systems causes waste in transportation. Avoid unnecessary steps in between processes to eliminate waste.
3) Motion: Unnecessary movement of machinery and operators causes wear and tear fatigue. It includes poor workstation layout, production planning, and process design along with a lack of production standards that causes the issue. Avoid unnecessary movement of people as it costs money.
4) Waiting: While processing material, if one of the steps is slow then it accumulates work in progress is a waste. Connect processes well so that no time is wasted. Long set-up times with poor communication and lack of process control cause waiting. Idle equipment and producing a forecast also cause a problem.
5) Over-production: producing items that are in access is overproduction which leads to waste of some items. Do not do more than what customers want. It creates several negative effects causing unreliable processes with unstable production schedules. Here customer needs are not clear with poor automation and long or delayed set-up times and producing more than usually needed to create problems.
6) Over-processing: It is something that doing more than required. It is a sign of a poorly designed process. Providing features that are not demanded by customers is over-processing. Poor communication and not understanding customer's needs with human error and slow approval process or any excessive reporting can cause over-processing. Do not produce more than what customers need can eliminate the issue.
7) Defects: Defects create rework and are not acceptable by customers and have to be eliminated compulsorily. It impacts on time, money, resources along with customer satisfaction. Specific defect causes include poor quality control at production with poor machine repair and lack of proper documentation and process standards. Also, not understanding customers' needs and inaccurate inventory levels causes defects. Avoid mistakes or the production of bad quality goods.