8 types of wastes your manufacturing company needs to eliminate

In manufacturing, waste is any activity that consumes resources without producing value. Waste is a major issue in manufacturing because it can lead to poor quality and low productivity.

In order to reduce waste in your company, it’s important to understand the different types of waste that negatively affect your button line. There are eight types of waste that every company needs to be aware of and eliminate, if possible:

Raw materials

One of the biggest types of waste in manufacturing is raw materials. This is because they’re typically the most expensive part of the process and can be wasted in many ways.

For example, using too much or using the wrong type of material will lead to more waste than necessary. The use of correct amounts and types of materials can help reduce this type of waste significantly.

Outside service providers or vendors

You should reduce the number of outsourced processes and vendors. Outsourcing is common in manufacturing businesses but can lead to waste if you don’t do it properly. Fortunately, there are ways to use outsourcing to your advantage.

For example, using manufacturing firms that specialize in lean manufacturing consultancy is a method that many companies use to ensure they have a good handle on waste management.

Work in progress

Work in progress (WIP) is a waste in the manufacturing process. It is materials, labor, and time that isn’t being used to make a product. Many businesses are able to reduce WIP by reducing the downtime between product manufacturing.

Finished goods

Manufacturing businesses often have a lot of finished goods sitting around in their warehouses because they were made too quickly or because they’re waiting for something else to happen before they can ship them out.

The cost of this waste is often the most difficult for companies to reduce, but you can do some things. For instance, improving quality management systems and process optimization will help reduce the amount of time spent making products without reducing quality or performance by any significant amount.

Utilities & maintenance

Utilities and maintenance are often overlooked, but they can be a high cost for your business. Utilities include electricity, heating, and air conditioning. Maintenance includes the repair and upkeep of machinery, equipment, and buildings.

Transportation

One of the biggest wastes in manufacturing is transportation. This happens when products are moved from one location to another, which can be reduced by moving closer to the customer.

Transportation waste can also be reduced by using fewer suppliers and vendors and more efficient modes of transportation, such as railroads.

Administrative costs

The cost of managing a business includes the cost of running an office, paying wages and salaries, buying supplies and stationery, etc. The cost can be reduced by taking care of paperwork efficiently with the help of software that automates most of these tasks for you.

Employee turnover and retention

Employee turnover is a major cost to businesses. The average cost of turnover ranges from 25% to 100% of an employee’s annual salary, according to the Society for Human Resource Management (SHRM). This means that if you’re paying someone $50,000 per year and they leave, you’ll spend anywhere from $12,500 – $25,000 on finding and hiring their replacement.