- On April 15, 2021
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- coo, increase profit, reduce cost, reduce waste, Supply Chain, sustainability
Why Supply Chain Leaders Look to Reduce Waste
In 2021, sustainability is an increasingly hot topic for consumers and manufacturers alike. With the expanding population expected to overwhelm the available resources by 2050, businesses have a greater responsibility than ever before to conserve resources and reduce waste. Furthermore, operations leaders are starting to see the value of increasingly sustainable practices, particularly when it comes to waste reduction and water efficiency. The majority of supply chain professionals plan to invest in waste reduction, ethical sourcing, water-efficiency improvements, and carbon emission reduction over the next 18 months (1).
Let us take a closer look at waste reduction. Wasted materials cost a business two-fold: once the materials are purchased and processed, and again when they are disposed of. Materials cost approximately $30 to recycle, $50 to send to a landfill, and $75 to incinerate per ton (2). When you consider all the industrial waste in the United States (some estimates reach 8billion tons), the opportunity for cost savings is significant. This is especially true when you consider that the United States recycles approximately 30% of its waste stream, but up to 75% of waste is recyclable (3). It is no wonder why the majority (53%) of supply chain professionals view reducing waste as the right thing to do and a significant opportunity for financial payback (1).
Simplify Your Industrial Waste Management
Industrial waste management can be tricky. Waste streams are complicated to measure, track, and evaluate, especially when it comes to by-products. Luckily, operations leaders can use cutting-edge technology to gain full visibility into their production processes, simplifying waste management.
With all your operational data in one up-to-date system, you can quickly identify which production processes create what by-products and how much is being produced. This allows you to determine how you can decrease waste by repurposing or recycling the by-products or seeing how production can be improved to lessen the wasted material. For example, a plant that manufactures orange juice can see how many orange peels are produced per cup of orange juice. Operations leaders can then find ways to repurpose the peels, such as using them to create candied orange peels, selling them as animal feed, or using the peels as compost to grow more oranges. This not only reduces waste but may, in fact, uncover untapped revenue streams!
Optimal inventory management is paramount to reducing waste. To avoid overordering, you need to know precisely how much of each raw material you have in store and how much you will need, and when. This is especially important when raw materials are perishable or have high storage costs, as in the food industry. Demand planning based on customer and supplier data allows you to predict when and what you need to purchase more accurately. Furthermore, real-time updates to your customer orders and inventory levels will enable you to identify how much of each product you need to produce so that you can avoid costly overproduction. Scheduled quality control checks and standardized processes also allow you to avoid any product defects and the resulting wasted materials, time, and labor.
Waste reduction in manufacturing has significant benefits to both the environment and your bottom line! Operations leaders use integrated business technology to track their inventory and operational processes, allowing them to identify opportunities for waste reduction and increased efficiency easily.
Learn more on how to decrease waste in the manufacturing industry: https://softengine.com/resources/whitepaper/manufacturing-waste/
Learn more on how to decrease waste in the food and beverage industry: https://softengine.com/resources/whitepaper/food-waste/