Tag: waste

OM in the News: Reducing Manufacturing Waste

With inflation keeping the cost of raw materials high, it has become more important than ever for manufacturing companies to reduce waste as much as possible. Not only is this strategy good for the environment, and the company’s bottom line, but it can also boost employee well-being and morale, writes Industry Week (Nov. 12, 2024). Here are five approaches:

  1. Use Less Material. One obvious solution is to cut down on the amount of materials used. To help identify where waste is coming from – whether it is using more energy or thread than needed to produce a shirt, or printing reports that could easily be shared digitally – a thorough examination of a company’s practices is the first step. Recycling should be prioritized, including printer cartridges, old computers, monitors and batteries from small devices. Recycle containers should be near every workstation.
  2. Save Time. Time management can help cut down on waste substantially by reallocating unnecessary work to more important tasks that will help boost profit. Real-time tracking using radio-frequency identification (RFID) uses radio waves to follow a product from the beginning of manufacturing all the way through to shipping. This helps identify how to potentially streamline and speed up the production process.
  3. Embrace Artificial Intelligence. AI has the potential to discover new areas for improvement that humans may not be able to identify on their own. For example, it could be used to analyze the motion of workers and products throughout the manufacturing process. Cameras can be placed throughout a factory to capture the necessary information for the AI system to review and analyze.
  4. Optimize Workflow. Another type of waste that is important to a manufacturing company’s success is excess movement. When an employee is able to produce more without having to work as hard physically, there is less wear and tear on their bodies. This results in less injuries and sick time needing to be taken, happier employees and ultimately an increase in worker productivity.
  5. Utilize Talent. Initiating training programs to educate employees on best practices can also reduce waste. When employees perform work that unnecessarily squanders both materials and time, they need to be taught there is a better and often easier way to complete those jobs.

Classroom discussion questions:

  1. In addition to these 5 ideas in Industry Week, provide several others to reduce waste.
  2. How else can AI be used in a manufacturing process?

OM in the News: What It Takes to Go to a Circular Economy

We take resources from the earth. We make things out of them for use. And then, we throw away whatever is left. The cost is borne out not only in landfills, but also through emissions, as our consumption fuels the climate degradation.

 Shifting a “linear economy” toward circularity requires major changes to business and operating models, supply chains, and B2B and B2C consumer behavior. Yet circular solutions can contribute to a better future. We discuss this “circular economy” in Supp. 5 (see p. 197).

The World Economic Forum recently brought together four industry leaders whose ideas on what it takes to go circular are summarized below:

First exec: For mature companies, the mindset shift means making investments in areas where there may not be imminent business value or impact. For those at the beginning of this journey, it can start with small steps towards replacing existing materials (such as packaging) with more sustainable and economically viable alternatives. These small steps can have huge short-term impacts and set the path toward more systemic changes in the future.

Second exec: Start by developing a clear picture of global end-to-end impact, including supply, production and use of material flows. Embed a circularity mindset and principles across all parts of the company, starting with business strategy, innovation process, capital allocation, HR management and rewards, brand positioning, marketing, etc. Sustainability commitments then become an integral part of a company’s purpose and culture.

Third exec: It is important to look at your pillars and targets day by day. Success isn’t measured overnight, and each milestone resets with a new target. Staying committed to the course is what ultimately changes behaviors and mindsets and garners results. Five key pillars underpin the strategy: (1) understanding organizational resource flows to reduce waste; (2) implementing internal systems to maximize the value of resources: (3) supporting supply chain to progress towards circularity; (4) engaging with customers to help them make circular choices; and (5) supporting innovation to accelerate the global transition to a circular economy.

Fourth exec: The transformation spans decades, so there is a “before” the transformation, but not yet an “after”. To start the transformation, it will help to define circular objectives for the company overall as well as for all areas of the company, so all areas of the company can contribute. Attention has to be paid to sustainability and circular economy. Messaging has to be consistent and repeated by line management.

Classroom discussion questions:

  1. How has a company you are familiar with moved towards circularity?
  2. Summarize the key points of the executives quoted.