Our household sets out our refuse, recycling, and green waste containers for curbside pickup by our waste hauler every Friday. We do our part by minimizing waste to landfill by carefully segregating our recyclables and compostables from the refuse. With the exception of junk mail and yard waste, we have paid for all this stuff and also pay to get rid of it weekly.
Merriam-Webster Dictionary defines a waste products as:
“…debris resulting from a process (as of manufacture) that is of no further use to the system producing it…” Merriam-Webster Dictionary
Waste is typically viewed by businesses as an unavoidable output of their manufacturing process and is considered a cost of doing business that is managed reactively. At best, costs are managed by negotiating the best pricing available from waste haulers and recyclers. Many times this might not even be an option due to lack of local sourcing options or leverage from waste volumes.
Fortunately, Lean Manufacturing offers an alternative, strategic view of waste. Elimination of waste is a cornerstone of the Toyota Production System (TPS). Toyota identifies several types of waste. Waste is viewed as opportunity to improve processes and therefore the bottom line of an organization. Packaging is a visible sign of waste in your process.
In a previous post, we highlighted the value of Management by Walking Around. A great place to start your walk is at the end of the process looking into the dumpsters and recycling bins. Majority of the materials (except employee waste) is purchased by your company. Cost of packaging is included in this purchase price. Assuming an manufacturing industry average of 2% – 3% packaging material cost, you can determine your annualized spend on inbound packaging by applying to your annualized spend on production goods. (Also don’t overlook improved packaging designs to optimize transportation costs and decrease your labor costs as well.)
Here are some thoughts on proactively reviewing packaging cost and waste reduction opportunities:
- Establish a solid waste data baseline including refuse and recycling (by type)
- Determine your annualized spend on your inbound supplier packaging
- Document your highest waste generation (cost) by part type and/or supplier
- Require that your suppliers give consideration to alternative packaging methods and materials driving cost and waste reductions
- Track and communicate your cost/waste reduction successes
Happy dumpster diving!