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3 Areas to Examine for Reducing Supply Chain Waste

Paul Vrzal | Aug 11, 2016

Category: Industrial

When you are running a business, it's important to look for new ways to reduce waste. Whether you are evaluating alternative methods for package your goods or have discovered a ...

supply chain analysis.jpgWhen you are running a business, it's important to look for new ways to reduce waste. Whether you are evaluating alternative methods for package your goods or have discovered a more streamlined approach to internal processes, examining your entire supply chain is essential. Your profit will depend on a number of factors, and the reduction of wasted time and materials can make a significant impact in your bottom line. In order to make the necessary changes, a careful supply chain analysis is a must.

Here are a few tips to get you started:

1. Inventory 

Too much inventory, whether it be raw materials or final merchandise, can produce an exorbitant amount of waste. An overabundance of inventory can lead to expired goods, items that can no longer be used in new processes, or the need for additional storage. Ultimately, high levels of inventory will end up costing more money than it's worth. Save yourself the headache and begin by reviewing the items you already own and compare them to levels needed to actually run your business. From there lengthen the time in between orders to slow down the incoming rate of inventory.

2. Time

One aspect of a waste supply chain analysis that is often overlooked is time. Time spent in procurement, production, and moving your product from place to place. A few wasted minutes here and a few seconds there turn into hours the larger your facility becomes. Your employees are a supply chain expense just like the raw materials needed to run production lines but often get overlooked.

Start optimizing time by making small tasks a little faster and then slowly move your way up to the larger and more comprehensive activities. One way to save time in your supply chain is in procurement. By automating ordering and billing activities, employees are free to work on other to-do's they may be been saved for another day.

3. Delivery 

Business waste is often discovered when analyzing how your product is transported from your facility to distributors. While product packaging is usually the first thing to be simplified, logistics of the product are equally as important. If you want to optimize your logistics the key areas to address in your supply chain analysis are how your product is being loaded onto the truck, time spent in between deliveries, and how the product is being pulled from the warehouse.

Reducing waste throughout your supply chain is essential to making a profit, especially for growing organizations. Changes may seem small but over time can really add up. For example, a simple packaging change may only yield a 10-cent savings but multiplied over thousands of deliveries the impact to your bottom line is meaningful. If you are running a business on a tight profit margin, hunting for ways to streamline processes and reduce waste whenever possible will provide a much-needed edge over the competition.

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