Practically every industrial engineer and floor manager is familiar with the seven wastes of lean manufacturing. While this theory was originally developed by Toyota as a way to control waste at their fabrication facilities, the theory can apply to nearly every production floor.
Employee time is one of the most expensive resources your company invests in. When production lines are ill-timed or maintenance delays employees from doing their jobs, those man hours can never be replaced.
Surplus production hurts your company’s profits in several ways. Firstly, the cost of extra materials and misuse of employee time cuts into your total profit. Secondly, overages have to be stored, entailing warehouse costs. Eventually, the product has to be sold. The surplus will increase the supply in a marketplace with low demand. This decreases the overall value of product on the market.
Damaged product is a waste of both materials and labor. As the piece is discarded or recycled, a company must incur the costs of these operations.
Many managers tend to think of over-processing as spending too much time on product fabrication, but in actuality this can also refer to added steps in the production process or excess material in a product’s design. While a product redesign can be part of the solution, it might not be practical. Therefore, it is advisable to evaluate each stage of fabrication for efficiency. APS software can run simulations to determine more efficient methods of production without running up the costs of experimentation on the factory floor.
While it is next to impossible to eliminate this cost entirely, there is a multitude of ways that companies waste resources during transportation. Inefficient schedules can result in trucks leaving one fabrication facility half-empty, while product in other facilities pile up in storage.