Reduce Supply Chain Waste in 6 Easy Steps
If your logistics company is like most, you likely already have a comprehensive waste and recycling program implemented. However, significant cost saving opportunities still exist. When analyzing the supply chain and identifying where waste is occurring, additional savings can be found by working on how waste can be designed out of the process.
Additionally. investors are increasingly applying ESG (Environmental, Social, Governance) non-financial factors as part of their analysis process to identify material risks and growth opportunities. This means more and more, companies are being measured on their environmental performance as well as their financial capabilities. So it is increasingly important now more than ever to make sure your waste management operations are as sustainable as they can possibly be. Below, we outline six easy steps you can take to reduce supply chain waste which can make a real impact on your business and its future.
1. Engage Your Customers
It’s important to engage your customers from the start and get them involved in your process improvement initiative to help ensure they have a positive experience. While it might seem like the end of the process, rather than the beginning, any waste elimination effort must not diminish your customer’s satisfaction.
Customers can be a valuable source of inspiration for process improvement whether it be through direct feedback or through customer surveys that can provide direct competitor comparisons for valuable market insight.
2. Review Operations for Unnecessary Procedures
Your own workforce can be asked to assess the efficiency of each part of the supply chain or highlight areas of concern. Employees will be able to provide valuable feedback into wasteful practices within your internal operations. Practices can then be prioritized by how wasteful they are and by the ROI that can be achieved by implementing the change.
3. Review Delivery Procedures
When looked at individually, a broken pallet or a bulk delivery wrapped in excessive packaging may look to be incidental to operational costs. However, when these issues are multiplied over the entire operation and the course of time, these wastes can easily result in substantial annual expenses. Excessive packaging costs your operations twice, since it takes staff longer to break the goods apart, as well as increasing your disposal costs.
Key areas for review include pallet loss and breakage, ratio of defective parts, and time and waste materials generated when breaking down bulk deliveries.
4. Involve Your Suppliers
Suppliers should also be very keen to assist in your supply chain waste review since it often will lead to an increase in business for them and more cohesive relationships if they can successfully resolve your issues.
Common areas that you can discuss with suppliers to reduce product waste are:
- Ratio of defective parts
- Recyclability, weight and volume of packaging materials
- Packaging take-back options
- Bulk order and packaging quantities, to reduce the need to dismantle and repackage product
5. Review Returns Handling
While an accommodating returns policy greatly increases customer satisfaction, it requires efficient management of those items when they come back to your facilities to prevent them from becoming a costly waste product. Mapping the return path will highlight if any products are being sent unnecessarily to trash, when instead they could be repackaged for sale or identified as defective and returned to suppliers.
In some instances, certain returned materials may require secure destruction via a certified contractor with production of the necessary documents of destruction.
6. Conduct Audits and Establish Reduction Targets
Once you’ve completed these waste minimization practices, set up regular audits in order to ensure that standards are upheld. Once the inefficiencies have been identified, it becomes a relatively easy process to monitor the processes and make small further improvements where necessary.
Create template reports to enable those who are monitoring performance to be able to check that operations remain within the established ranges. Then once you’re consistently achieving the goals set, you can set new targets to make the supply chain even more efficient and less wasteful.
Build Waste Reduction Into Your Supply Chain with NWA
National Waste Associates (NWA) has 4 generations of experience providing practical, low-cost waste management solutions to the logistics industry. We are able to apply this experience to provide your business with best practice guidance that has generated proven savings in the real world. Click on this link to learn how we saved a client $150,000 by doing this.
Our expert team looks at your operations holistically and provides solutions that are tailored right down to the individual location. This diligent approach provides the greatest savings in the fastest time, prioritizing the areas of the business that are costing you the most.
At the same time, we’ll also recommend how to streamline your waste operations so you’ll have the lowest carbon footprint, and the maximum value is extracted from all resources consumed.
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