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Operations Q&A: What's the Price of Waste?

Operations Q&A: What's the Price of Waste?

April 16, 2015

Question: What’s the price of waste?

Answer: What do you think when you hear the word “waste?” For me, it is the refuse filling up my trash cans or littering the streets. For the purpose of this blog, “waste” is something quite different.

Look around your organization. What activities do you see that are ineffective, unproductive, excessive or unnecessary? That is waste. And there is plenty more that's not so obvious in your distribution center.

Bottom Line: Waste slows down processes. It increases costs. It provides no value to your organization or, more importantly, to your customer.

Here are some real world examples of waste that I have observed while working with my distribution clients. How many of these illustrations can you relate to?

  • Order pickers on a forklift wander the aisle, traveling from side-to-side looking for inventory. The pick ticket indicated there was inventory on hand in a specific location but it's empty. Order pickers spend precious minutes searching for what is supposed to be in stock, but never find what they are looking for.
  • To help the warehouse easily identify the special needs, pick tickets are printed on colored paper. Each time orders arrive with special handling needs, someone must pull the tray from the printer, insert the colored stock and then print.
  • A mound of boxes, four feet tall at its apex, apparently randomly tossed, sits in the middle of the warehouse floor. Customer returns, unprocessed, waiting to be attended to – but instead it grows daily.

Waste can take many forms, both tangible and less visible. There are ones that are systemic and those that are culturally engrained. Who pays for this waste? Your company does, in higher costs, reduced productivity and, most importantly, depleted customer satisfaction.

Jump on the waste removal bandwagon. It will pay long term dividends.

I welcome your comments at lee@schwartzpro.com.

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