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Did you know that USD163b worth of inventory is discarded globally each year due to expiry or overproduction1? Loss and waste are often hidden costs throughout the supply chain that hold your company back from reaching optimal performance.  

Here at CCi, we believe identifying loss and waste plays a key role in the overall continuous improvement journey, with the removal of non-value adding activities, inefficient practices and process that stagnate growth being a core principle in Lean methodology. 

The high cost of waste in manufacturing processes 

When we consider what waste looks like in the manufacturing and supply chain industries, we can’t look past Taiichi Ohno, who is considered one of the founding fathers of the Toyota Production System (TPS). He developed the seven wastes listed below: 

  • Transportation – unnecessary movement and handling of material 
  • Inventory – excessive raw materials, WIP or finished goods 
  • Motion – any movement of equipment or an employee that doesn’t add value 
  • Waiting (or delays) – any employee or equipment that is available but waiting for some form of input 
  • Overproduction – producing more than what the customer requires 
  • Over-processing – using excessive capacity or energy without adding value 
  • Defects – defective product requiring rework 

When Lean methodology was adopted within the Western world, an eighth waste was identified: 

  • Non-utilized talent – not capitalizing on employee’s ideas and skills 

Each of the above wastes wreak havoc on efficiency, but are also detrimental to your company environmentally, financially, reputationally, and socially. Alongside bottom-line impacts from unused raw materials and production delays, as consumers become more concerned with sustainability, high waste levels risk long term brand damage and the loss of a customer base. 

How to drive sustainable change through waste reduction 

Waste reduction can take a back seat in the wider context of company operations. It may be seen as “just another thing to add to the list”. However, by identifying and eliminating the causes of waste systematically across your supply chain, you naturally optimize your processes and boost overall performance.  

Conducting activities such as a Waste Walk gives operations leaders and teams the opportunity to identify unnecessary material, time and energy and highlight inefficiencies. CCi is your partner in embedding this change, empowering your teams through the tools and frameworks you need to turn waste reduction into one of your greatest drivers of efficiency and growth.  

As Zhejiang O.R.G Packaging found through their journey with CCi TRACC, high manufacturing costs were holding the company back from optimal product quality, communication and collaboration between functions. Loss and waste analysis data helped the team to identify 11 improvement projects in production efficiency. Targeting these through the implementation of seven TRACC best practices, the company realised a 7.6% increase in production volume and 24.68% reduction in scrap rate for 500ml aluminium cans within six months. 

The efficiency benefits of your waste reduction efforts 

By eliminating unnecessary processes, materials, time and energy, companies can significantly reduce their costs and increase their productivity, leading to a healthier bottom line. Alongside this, a focus on reducing waste reduces your environmental footprint and makes your operations more sustainable.  

Streamlined processes also speed up your delivery times and result in fewer errors to increase your customers’ satisfaction. However, the real measure that will promote a sustained culture of continuous improvement is the increase in employee morale. Engaging your people and empowering teams to take ownership and contribute to positive change will give you a more engaged workforce that prioritizes problem-solving and continued optimization.  

1. The missing billions: The real cost of supply chain waste, Avery Dennison 

About the author

Ed Koch 

Chief Solutions Officer, CCi 

Ed has 25 years’ experience in operations management and in implementing global improvement programs at multinationals including Unilever, SABMiller, and ABInBev. Ed’s areas of expertise include harnessing digital solutions and traditional lean operational excellence for supply chain value, organization design, supply chain integration and asset care.

Find out more

To find out more about continuous improvement processes and solutions like the Waste Walk mentioned above, check out our free downloadable resources. You’ll gain practical insights and guidance to step up and sustain your operations performance.  

If you have any questions or would like to get in touch, you can contact us here.