Lean Systems and Waste Elimination

Waste elimination is one of the most effective ways to increase the profitability of any business, and waste elimination is one of the leading ideas of lean manufacturing. Even though parts and products can vary, there are many similarities in inefficiencies. We define waste, or muda, as any product, tool, or process that is unproductive or doesn’t add value. A company should create a strategy to reduce or cut each type of waste to improve the performance of the company. The first step to eliminating waste is identifying the causes of the waste in your business.

Excess inventory is a leading cause of waste. Inventory is the number of materials or work-in-progress (WIP) stock within the system. Materials or WIP that you haven’t sold to a customer represent unrecognized value. Companies can speed up the process of converting raw materials into a product or service to help increase cash flow and eliminate that waste. Reducing inventory or WIP reduces lead times and the amount of labor and capital. There are many reasons why companies have excessive amounts of inventory. However, lean systems require those reasons to add value.

Eliminating waste in the supply chain could include eliminating waste in some of or all the following areas:

• Material ordered too soon
• Parts not needed (over-orders or not figured out yet)
• Spare material and tools on hand but not used
• Extra material and tools not needed
• Material and tools over-purchased
• Material and tools purchased “in case it's needed”
• Material and tools lost or not returned
• Not returning excess for credit back to a vendor
• Not completing the return merchandise authorization (RMA) paperwork associated with returns to vendor
• Over-purchasing of supplies, forms, envelopes, marketing material, etc.
• Storage and movement of over-supply

Strategies to eliminate waste from inventory include adopting just-in-time manufacturing, reducing buffers between production steps, and investing in efficiency improvements for the production process. For more examples of how JR Automation has helped cut waste with custom automated solutions, view our case studies.