Wasting Money In Business Will Eat Away Your Profit
When you are wasting money, you are slowly eating away at your profit
. But before you can fix the problems, you have to figure out where the waste is coming from. Waste is present in all companies, but in good companies it is identified as soon as possible and eliminated or at least scaled back.
You are never going to totally eliminate waste in all of its forms, but you can minimize it and make its impact less. But first you have to identify the types of waste that you want to fix. The main areas that it affects business is in time, space and materials and there are different ways that it is present in those things.
Time can be wasted in multiple ways such as reworking parts that were made incorrectly the first time. But the worse part of making errors or mistakes is that it impacts multiple areas of waste. It not only wastes time, but it wastes materials so you are essentially getting hit twice for the same mistake. That means you will have to use more materials than you were planning on using so you will have to order more or have more space to house extra just in case you make a mistake. And if you are storing extra material, now you are wasting space as well. Space that could be utilized for a more productive use and a more profitable outcome.
Another waste is easy to identify without using machines. The machinery that is being underutilized or not being used at all is a waste of capital investment and space. If automated processes are waiting for human processes, then there is a lag in efficiency. You have to find ways to keep the machines running as much as possible and may have to rethink the process to get there.
It may be more complicated, but in the end, you want to run as efficiently as possible and want to work with everyone working machines. When one process is waiting for another process to finish before you started, then there is no downtime can be better utilized. Better yet, find a way to keep the work processes and none of them expects the other to the end. Having each process and each department in advance and not wait until the job is the best way to accomplish this.
by: Craig Calvin
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