Industryweek 3489 Iw0211hale

Rooting Out Manufacturing Waste

Jan. 14, 2011
Hidden waste may not be visible, but ignoring it can be costly.

Has the new year brought with it a renewed sense of purpose about eliminating waste throughout your manufacturing company? If yes, focus not only on rooting out the visible waste in your organization, but also on removing the "hidden" sources of waste.

Visible waste is just that, apparent to the naked eye and includes such things as scrap and rework. Being visible, such waste remediation opportunities quickly come under scrutiny. Hidden waste, on the other hand, is waste that is not readily visible. It may also be actions or processes that mentally may not be considered waste, but are. And there's plenty of them.

"Every single business has significant waste opportunities they haven't put their hands around," says Ryan Hale, principal with Stroud Consulting.

Ryan Hale: "Every single business has significant waste opportunities they haven't put their hands around."

Examples of hidden waste are plentiful. Consider the plant that takes a pump out of production one shift per month for maintenance. If the pump truly requires that amount of downtime, then waste isn't part of the discussion. However, if the pump is out of commission for one shift because of a built-in (and possibly faulty) assumption that eight hours of downtime is required when the work could be completed in six, then the two extra hours the pump is out of commission is wasted capacity.

Overdesigned products may be another source of hidden waste, Hale suggests. Products designed at a time when raw materials were cheap may include features well beyond what customers need or want. They were included simply because they were inexpensive add-ons. With the rise in raw materials costs, the unnecessary extras cost manufacturing, which is another form of waste.

A third example may be the logistics and shipping department that continues to use the same mix of transportation modes simply because that is the way it's always been done. The department may be perpetuating the waste of higher costs if it never questions whether better alternatives exist.

Every person can find waste in his area of the business, but in particular examine the interfaces between functions for opportunities, such as between sales and operations or operations and shipping, says Hale. They are a key place holder for hidden waste.

That said, the best approach is to look for opportunity everywhere. "Challenge constraints in a healthy way," Hale says. "It doesn't have to be confrontational. Make it exploratory."

Ultimately, you never run out of opportunities to remove hidden waste, he says. "If you have that mindset, you'll be vigilant about it."

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