Toyota has identified distinct seven areas in business operations that attribute to wasteful inefficiencies which include: waiting time, process, overproduction, transport, inventory, movement and poor quality control. These areas have a very high probability of pulling down a company's profit potential due to excesses, resulting to the threat towards sustainability.
It can be deceiving to think that just because you can't see any waste, then waste is not there. A very bad example of how the majority of establishments nowadays just pay lipservice to the principles of sustainability is the overproduction waste. In fact, many organizations believe that overproduction is a necessary part of doing business.
Overproduction waste is simply the production of goods in quantities that are greater than demand. This position will be especially aggravated during an economic slowdown and will become very difficult to reverse. Remember that for an item to be "overproduced" it will have incurred additional elements of waste all the way down the lifecycle process, including administrative and financial loss.
In corporate culture, there is a feeling that if a production line is not utilized 100% of the time, or if particular employees are allowed to be idle at all, that this is more wasteful than letting them operate 24/7. This is a very common misconception which needs a more intelligent assessment of equipment ROI.
If overproduction waste and excess is endemic in the organization, the company will be hemorrhaging resources. Remember that every item produced carries a cost in terms of backup, support, administration, finance and other overheads and as it sits on a shelf, the company's profit potential also gathers dust with it.
Systemically, overproduction waste can be reduced or eliminated if a management system is incorporated to reveal excesses and also to correlate production to the work order pipeline. Quite simply, if a sale is not made or projected, the production equipment should be constrained from engaging.
In the modern era, economic pressures lineup alongside environmental awareness to force every company to consider its own sustainability. While carbon emissions may be the poster child of sustainability, the concept includes waste reduction, water use consolidation and elimination of excess, wherever it may be found.
Comprehensive management tools for sustainability will help organizations better understand their position in terms of being able to identify areas of inefficiencies and excesses, like overproduction waste. Such systems will almost always pay for themselves in short order.
Author Resource:-
Sustainability Resource Planning (SRP) platform delivers a broad range of enterprise solutions to over 40 global clients with a service network of over 7,500 consultants consisting of 65,000 application users. Verisae's software manages, and monetizes energy costs and carbon emissions while providing a rapid ROI. Learn more at http://www.verisae.com/articles
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