Top 7 types of waste

What is waste?

Anything that does not add value to your product is waste. The value can be determined by asking yourself, “would my client be willing to pay for this?”

What are the common types of waste?

1. Lead time What is the time between the receipt of an order and the delivery of that order? Close examination of the processes that make-up the lead time should be constantly examined and improved on. Never be satisfied – strive for constant improvement.
2. Labour Are your staff being fully utilised? What day-to-day problems do staff experience that minimises productivity? Something as simple as ‘how materials are organised’ can have a large impact on productivity in the workplace. Tip: Storing materials that are used frequently close to the site of use can drastically improve productivity.
3. Packaging Does the packaging add value to the product? In some instances yes, the packaging on display in a shop can be extremely effective with regards to sales, however the bulk packaging of goods before it reaches the shelves is another story. All of this packing material costs money and does not add value, find ways of re-using packing material. Many companies have deposit return systems on their packaging components. Clients will get discounts on their next order if packaging is returned.
4. Transport The cost of transport is one that does not add value to the finished product. Try to minimise your transportation costs. Compare hiring verses buying a delivery truck, taking into account not just the initial costs of a truck, maintenance, insurance, licence but also the hourly cost of a driver. Tip: Offer incentives to your clients to get them to collect the goods rather than you delivering.
5. Storage Inventory takes up space, this means that you need storage space, this in turn means a larger factory or additional warehousing to keep inventory. Some people may argue that buying materials in bulk saves money, however if you have to lend money to pay for the additional materials and pay for storage space are you really saving? Plan properly, and buy as you need materials.
6. Off cuts/physical waste This is the waste from manufacturing your end product. Some companies have found new ways of turning that waste into profit. Example: A roofing company has small off-cuts of wood; these are packaged into simple bags and sold as cheap firewood. The key to this is to make sure that the additional time it takes packaging the loose wood does not affect the original product or its processes.
7. Losses Take a good look at your processes, do you know where you are losing out? Some losses can be through theft, others incidental (one painter uses more paint than another). You may find that splitting your materials into smaller batches causes less waste as there is less on hand. Tip: Let your batches be divided into the average amount consumed per job card. This way staff will only take what is needed.