Reducing waste in manufacturing

It’s never been more important for manufacturers to reduce waste. According to a Deloitte survey, a third of consumers have stopped purchasing certain brands because they had ethical or sustainability related concerns about them.

However, according to research from media company Edie, 74% of executives in the sector admitted that they do not have a complete understanding of their company’s absolute carbon footprint and the changes that will need to be made to reduce emissions.

Michel Doppert is Director of 22Improve Coaching and a Lead Instructor for The Lean Six Sigma Company. He says that it is vital that manufacturing leaders get to grips with reducing waste.

“The market is no longer only competitive from a financial point of view, but also from a social or environmental point of view,” he explains. “Manufacturing companies will not be able to dodge the increasing pressure of a society that is looking for more environmentally friendly manufacturing process.”

And it’s not just customers that businesses risk losing if they don’t reduce their waste. PwC research found that 65% of people across China, Germany, India, the UK and the US want to work for an organisation with a strong social conscience.

Of course, there are reasons that make a reduction in waste a good idea too. A leaner business should be more profitable. “By reducing waste, you won’t make anything which has no value,” says Doppert. “If you only use your resources to provide value, it also has a positive effect on your employee satisfaction. People stop working harder and instead work smarter.”

Seeing the challenge

While the importance of reducing waste is evident, identifying areas of waste can be more difficult. Doppert recommends creating clear lines of communication that span from the top to the bottom of a company, and engaging with customers to find out what their concerns are.

“The ivory tower approach, where leadership is only looking at strategic issues and the long term, while your shop floor looks at short term issues, doesn’t work.

“Leadership should be more aware of what’s going on in society. You have to look around, talk to people and understand customers. I see many manufacturing companies that don’t do that and continue to use technology that pollutes. It’s a matter of time before they will be called out and shamed.”

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Targeting a culture change

When manufacturers have identified areas where there is waste, establishing relevant key performance indicators (KPIs) is an important first step in reduction. Doppert warns that too often, KPIs are set on a ‘push’ principle, in that automated dashboards tell colleagues what to do. He instead recommends exploring ‘pull’ KPIs, where colleagues are asked questions that help them identify and react to areas of waste in real time.

“Often KPIs are high level and strategic, but are of no value to people on the shopfloor that might be producing the waste,” he explains. “You want KPIs to be measured differently at every specific level based on the needs of that level. That will lead to a cascade upwards.”

And while this allows flexibility in KPIs, they do still need to link to the same organisational goals. “If you’re a CEO, your pull KPI isn’t going to be the same as a shopfloor worker,” he says. “But there has to be a coherent set of KPIs, starting from the bottom going right to the top which everybody can use for their work.”

He says that manufacturers must also move to a more responsive mindset generally. In a world where processes must be closely followed to ensure quality control, it can sometimes feel difficult to draw out creative solutions from colleagues. However, Doppert says that the Covid-19 pandemic provides a great opportunity to shift towards a new way of thinking.

“Thinking that everything will return to normal is not the right mindset,” he says. “You need a control plan and a response plan. In manufacturing, people are usually expected to work certain hours. But is it clever to have so many people coming in at the same time? Is that the way we want to work? Or do we want to use more technology and upgrade the skills of shopfloor workers so they can use robotic process automation to do the work?”

Lead the way

While ‘pull’ KPIs will be different for every organisation, establishing a culture change will always need to begin in the same place says Doppert. “It’s easy to say but difficult to do – it starts with leadership,” he explains. “Becoming lean and reducing waste is all about a mindset. The mindset isn’t about reducing cost but maximising capability.

“The key to bringing that mindset to people in an organisation is changing the mindset in the leadership team from one of firefighting to a more strategic point of view where you utilise staff to the full.

“Instead of seeing them as hands and feet, see them as brains. Leadership needs to look at apprenticeships schemes, increase skills of staff and change the way they work,” he concludes.

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