How to Identify and Reduce Waste in Manufacturing

The advent of digital transformation has provided a unique opportunity for manufacturers to embrace new technologies that will allow them to take their lean manufacturing initiatives to the next level. Of course, the goal of lean manufacturing is the continuous improvement of production processes, while eliminating waste and cutting costs.

Given the increasing complexity of operations, many companies have found that lean management by itself is not sufficient to address their operational challenges, and setting the stage for a lean system in reality is just the first step in the lean journey.

The implementation of a digital system that allows you to record and optimize your manufacturing productivity accurately and efficiently is what will transform your lean model to the next level.

What are the Benefits of Reducing Manufacturing Waste?

Manufacturing waste management is imperative. Governments have begun mandating waste reduction efforts, and customers are becoming more focused on sustainability. Manufacturers need to consider best practices for dealing with recyclable materials, excess raw materials, hazardous materials, and more.

There are many benefits to waste reduction:

Lower Cost

Waste management can be innovative and result in lower operating costs. Using technology and machine monitoring, raw materials are precisely allocated and consumed, leaving little material in the waste pile.

Excess raw materials and recyclable materials also have a robust resale market. And an excellent corporate waste management program will help offset losses by selling the material to be repurposed. Because one business's waste is another's raw material, there may be profitable offtakes for many by-products of the manufacturing industry.

Other industries have a waste exchange program or waste credits for those whose waste can serve as raw material input for another company (for example, a vegetable plant that sells its waste material to companies that produce animal feed).

Resource Preservation

Digital technologies, machine monitoring systems, and machine data platforms offer manufacturing precision that runs parallel to a company's waste reduction efforts. These systems monitor machine and factory conditions to control the use of energy, water, and other precious resources.

Other industries go a step further by using waste management machinery to reclaim materials or systems like reverse osmosis to reclaim wastewater for use within the facility.

Software systems allow waste inputs to be managed as part of the supply chain, and savvy companies can adopt a zero-waste mindset to drive home the importance of resource preservation.

Corporate Sustainability

Environment, sustainability, and governance (ESG) is a significant movement that seeks to incorporate waste management and reduction efforts into the corporate structure.

Today, sustainability has moved beyond recycling bins to a bigger vision of closed-loop manufacturing. In this model, companies move past manufacturing waste management programs to create a zero-waste mindset.

Purchasing only buys reusable and recyclable material, and everything from packaging materials to plastic waste and scraps is resold, reused, or repurposed. While this vision of manufacturing waste management is still on the horizon, it has a greater chance of coming to pass with digital manufacturing than with traditional manufacturing.

Higher Manufacturing Efficiency

If manufacturing processes generate waste, efficiency suffers. And poorly managed manufacturing waste streams can get out of hand. Space, labor, fines from compliance failures, and more can drag efficiency down. The waste produced by manufacturing is considerable, and eliminating waste doesn't mean it can't be reused. The use of recycled materials is one way to use waste effectively

Compliance

More and more, a company's waste is monitored and mandated by government entities. Fines for the volume of material sent to the landfill are more common. And mandates of how much of the manufacturing waste stream must be recycled are standard.

Companies that do a frank waste audit will find avenues to offload some waste while repurposing others. This process will limit their risk of fines or other punitive actions by government agencies and improve their brand image.

The Business Impact of Reducing Waste

In a time when the bottom line has never been more meaningful for companies, waste elimination is one of the most effective ways to increase the profitability of any business. Understanding what waste is and where it exists is essential to reduce or eliminate its effect on productivity, overall performance and quality. Many manufacturing software systems (otherwise known as MES) that either schedule jobs and/or track shop-floor metrics like overall equipment effectiveness (OEE) in real time can provide manufacturers the necessary tools to help achieve these objectives.

Without collecting and analyzing factory data, manufacturing managers are blind to problems occurring on the plant floor. Machine monitoring systems can contain a wealth of information about the health of the factory and opportunities for waste reduction, but many manufacturers simply haven’t invested in them due to a hesitancy to embrace the technology and modernization that solves these new challenges presented by digital transformation (discussed in our previous article).

By monitoring machine performance, not only can they correct existing inefficiencies, they can identify potential issues allowing them to effectively execute preventative or predictive maintenance measures. All that said, at MachineMetrics we are constantly learning from our customers and looking for ways to provide them opportunities to identify bottlenecks, wastes, and optimize their processes.

Below are some of the top areas of waste that we’ve found data collection can help dramatically improve:

Quality/Defects (10%-20% average loss in efficiency)

One of the most easily recognizable wastes in lean manufacturing is the production of Defects. Examples include waste such as scrap parts, products that require rework, or assemblies that are missing details. Defects are often considered to be one of the most significant manufacturing wastes because they can actually lead to the generation of additional wastes such as Overproduction, Transportation, and Excess Processing.

Overproduction (10%-20% average loss in efficiency)

Of all the wastes in manufacturing, Overproduction has, by far, the most negative impact on success. Overproduction occurs any time more parts or products are produced than the customer is willing to purchase. Like the production of Defects and subsequent Excess Processing, Overproduction can also lead to the generation of additional lean manufacturing wastes such as Waiting, Inventory, and Motion, consuming vast amounts of time and resources.

Planned Downtime/Setup (40-50% average loss in efficiency)

Unplanned Downtime/Waiting (40-50% average loss in efficiency)

Unplanned downtime is downtime that occurs unexpectedly or as a result of a failure (for example, a hardware failure or waiting on appropriate materials to complete a task). When product waits, no value is being produced but the cost of overhead operations continues to grow, which strips potential profit from the sale. Waiting not only destroys material and information flow, but also generates excess Inventory.

Asset Productivity (people and machines) (15%-25% average loss in efficiency)

While it’s essential for any manufacturer to optimize the productivity of their existing assets (people and machines), many have no way to measure this productivity effectively. Thus, opportunities to improve asset performance are constantly lost. OEE measures how well an asset is performing by building availability, performance and quality into one key performance measure. Understanding how OEE relates to waste helps pinpoint waste generated by the 6 Big Losses (Breakdowns, Setup and Adjustments, Small Stops, Reduced Speed, Startup Rejects, Production Rejects) trouble spots that undermine the goal of lean manufacturing, with the goal of constantly identifying opportunities for improvement.

Non-Utilized Talent:

The only lean manufacturing waste that is not manufacturing-process specific, but rather manufacturing management related, is Non-Utilized Talent. This type of manufacturing waste occurs when management in a manufacturing environment fails to ensure that all of their potential employee talent is being utilized. In relationship to Motion waste, if an employee is aimlessly moving material around the production area without adding value their efforts are being wasted where they could be performing value-added activities instead. Non-Utilized Talent also refers to management’s ability to utilize the critical thinking and continuous improvement feedback from employees to improve a lean manufacturing process. If management does not engage with manufacturing employees on topics of continuous improvement and allow employees to influence change for the better, it is considered manufacturing waste.

5 Ways to Reduce Manufacturing Waste

There are many ways to reduce waste in manufacturing:

Define Your Goals

Like beginning a digital transformation or lean journey, you can only understand where you’re going once you know where you are. Conduct an honest waste audit of your waste stream and then set waste reduction goals.

By defining waste reduction goals based on your unique waste stream, you can design waste reduction efforts that match reality.

Look at Packaging

Product packaging is one of the most critical components of manufacturing waste streams. Packaging should be redesigned from a minimalist mindset and utilize new raw materials and technology to include recyclable materials.

One great example is corn-based packing peanuts. These biodegradable materials can be used in place of Styrofoam peanuts or air packs, decreasing the amount of material destined for the landfill.

Improve Your Maintenance Strategy

Most companies in the manufacturing industry operate using a preventive maintenance schedule. But preventive maintenance isn't always waste-friendly. Reducing waste in the form of hazardous materials is dangerous and expensive using traditional means.
Some equipment can be run longer than others due to light-duty product mixes, reducing waste oil, lubricant, and solvent requirements. Generated waste may not be zero, but it can be significantly reduced.

Using a CMMS system helps zero in on areas where machines can run longer. Maintenance teams gain visibility over machine health to optimize repair and service that could reduce the amount of waste.

More advanced options like machine data platforms are available to measure machine health and high-frequency data. This lets maintenance staff replace parts before they fail, thus limiting the amount of waste created at a fail point.

Improve Inventory Control

Inventory management software optimizes inventory processes and reduces the overordering of materials. In many industries, perishability and expiry dates mean that too much material will result in excess inventory or waste.

Efficient inventory management deploys software to manage these risks and reduce the chance of waste on the front end. Optimum order quantities, just-in-time logistics, and other tasks are automated to optimize inventory levels. And the same packaging waste concerns that a manufacturer has can be mandated for a company's vendors so that incoming raw materials contain less waste packaging.

Implement Paperless Production

The days of manual paper-driven production processes are numbered. By utilizing shop floor control software, MES systems, or advanced manufacturing like IIoT, operators, technicians, and managers have specs, workflows, and other relevant documents at their fingertips.

Intuitive HMIs and tablets mean that when specs are changed or approvals are given for change orders, operators have the most up-to-date data and run less risk of over-producing and creating waste.

Driving Greater Productivity with Reduced Waste

Understanding your waste is at the heart of meeting the new standard for getting and keeping business: combining Big Data with lean manufacturing tools and strategies to maximize productivity.

Powerful process analytics tools like MachineMetrics allow manufacturers to “see inside” their production models and identify how energy is currently being used in their operations. Not only can you quickly identify and eliminate productivity drains in your existing production process, but you also gain access to additional data that can help you uncover “hidden” issues that could be negatively impacting your shop. In the end, gathering data -- and acting upon the derived insights -- is a necessary catalyst for improvement.

To achieve these standards of proactive (and eventual preventative) problem solving requires a full commitment that calls for the creation and implementation of integrated, highly efficient manufacturing systems that use less energy, increase productivity, and reduce maintenance costs across the plant. Harnessing the combined benefits of Big Data and intelligent modernization of manufacturing processes can revolutionize plant operations and business practices. The ability to capture, analyze and act on this data isn’t the future measuring stick for manufacturing success: it’s here now.