7 types of waste in manufacturing
The first is inventory waste: Inventory can be raw materials or finished products that have not been shipped. This is a source of capital that has not yet generated revenue. Therefore, if there are too many raw materials or products in inventory that exceed the necessary level, it will create many other costs for the business, such as: storage costs, warehouse costs, transportation costs, etc.
Second is transportation waste: The manufactured products will be transported from one workshop to another. However, during the transportation process, it is difficult to avoid damage to the transport vehicle causing delays. In this process, the customer does not pay, but only the business suffers the loss.
Third is the waste of operations: Quite similar to the waste in transportation, operations here are the redundant actions of production staff. For example: not being familiar with the work causing slow progress, wasting time looking for tools, etc.
The fourth is the waste of waiting: Waiting is the time when people and machines are down due to bottlenecks or breakdowns in the factory. This type of waste increases the cost per product because of the cost of employees and depreciation of equipment that must be maintained even if a breakdown occurs.
The fifth is the waste of overproduction: Overproduction occurs when the quantity to be produced is more than the customer's demand. This increases other types of costs such as: storage costs, goods preservation costs, etc.
Sixth is the waste of over-processing: At first glance, it sounds quite similar to the waste in production number 5 above, but over-processing is completely different. Here, it means that the product is manufactured much more complicated than the customer's requirements, such as: incorrect design, larger or smaller size, adding some unnecessary details, etc.
Inside the factory of Rang Dong Light Source and Vacuum Flask Joint Stock Company. Photo: Ngoc Xen
Seventh is waste of errors/defects: Errors are products that are technically defective or do not meet the aesthetic requirements of the manufacturer; Defects can be understood as errors in delivery, unusual changes in production schedules, providing incorrect product information, etc.
The need to eliminate 7 wastes in business
Eliminating 7 wastes helps businesses optimally meet service or product quality requirements. Thereby increasing satisfaction with the business; Limiting waste during the moving and transporting process helps the unit arrange and organize the working space reasonably. At the same time, it helps the production, delivery and service provision processes to always be on time;
Reducing waste due to defective goods helps save costs in operations and production. Thereby helping the unit reduce costs and ensure prices are always competitive with other competitors; Increase investment efficiency for production and business activities, helping to increase surplus value;
Help business owners know clearly the issues that need to be improved to ensure that goals are achieved on time, on schedule, and in the right quantity. Thereby promoting the business to move forward in the production process.
To survive and develop in the long term, it is necessary to find a solution to cut costs to the maximum. Because this is the only way to reduce product prices. This means eliminating the 7 types of waste in production that exist above from the business.
