Supply Chain Optimization - Reducing Waste


Reducing waste and non value added tasks within the supply chain is a great way of optimizing the Supply Chain.

Firstly to define waste we’ll take a look at the Seven Wastes. This is a well established path in segregating the types of waste within an organization - let’s take a look at how they can apply to supply chain.

1. Overproduction
This may take many forms from typically including producing too much documentation from quotations, requisitions, purchase orders. Overproduction can be characterized as producing too much of “a product” from one process step to another - with the recipient process not requiring as much as was provided.

2. Transportation
Typically characterized by over complex logistics routes and distance between warehouses and end users.

3. Waiting
High lead times can be a significant problem within supply chains - causing customer dissatisfaction and work stop in production environments - reducing lead times can result in both financial and efficiency benefits.

4. Inventory
Too much inventory is a common problem for organizations -ensuring that the right level of stock is available to meet requirements is a common supply chain task however overstocking does not utilize company cash effectively and requires additional overhead to resource.

5. Motion
Ensuring supply chain processes are optimized for the business environment can often be overlooked, poor planning of organizational layouts can be frustrating for the employees and dramatically reduce efficiency for example ensuring put away locations in warehouse environments are conveniently located, ensuring that workspaces are designed with ergonomics in mind.


6. Over processing
Reducing process steps to a minimum is required to reduce over processing which can rear it’s head in many forms - complex controls and authorizations are common areas for over processing.

7. Defects
Finally processes that require rework due to defects are a common cause of concern - for example Suppliers requiring more information due to poor technical specifications - incorrect order quantities, or  quality issues for products received in the warehouse are all common forms of defects. Supply chain improvement plans are often constructed to target all or a mixture of the above with a view of resources required to deliver the process output.


Such improvement programs are often referred to as “lean” or “leaning” and were popularized by activities from the Toyota organization. Research by the Canadian Logistics Industry have shown that of the wastes typically challenges are met in improving supplier lead time, improving forecasting and planning to improve stock requirement accuracy (and therefore reduce inventory) and improve Vendor Reliability (affecting both lead time and quality of product.)

Waste reduction is a key step in improving efficiency and over the past 15 years it has become a key part of the supply chain executives toolkit - and has the ability to impact both an organizations bottom line and the satisfaction of the customer.


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