In production and logistics environments, a lot of attention is paid to achieving optimal efficiency. It results in the best ratio between manufactured goods or delivered goods and the waste of resources (time, money, energy and raw materials) as little as possible. It's important to include indirect processes, such as the waste process, in the calculation of efficiency. Finally, the fewer working hours that go to this process, the more profitable the time factor is used.
This blog discusses various Lean methods for measuring efficiency in the process, and then discusses the role of internal waste logistics and the improvements that can be achieved in this.
Lean philosophy applied to achieve maximum efficiency
Production efficiency is often linked to the Lean philosophy, a working method that places a strong emphasis on continuous improvement of processes and value creation. To determine how efficient a process is, the output of a machine or even the entire production facility is divided by the maximum achievable output ratio. This is also referred to as resource efficiency.
Strive for a high utilization rate with process optimization
The aim is to use people and machines as productively as possible. The processing time (the time actually spent on the product or service) must be as high as possible in relation to the total time available. Nevertheless, this optimal use of resources does not always ensure the desired result, because it looks at sub-processes and not so much from order to delivery, in short, the total flow.
Flow efficiency increasingly important
With flow efficiency, it is not the employee or machine that is the central topic, but what goes through the process, also called the 'flow unit'. You follow a customer order through the entire process, as it were. To measure flow efficiency, divide the total processing time by the turnaround time.
But do you determine the optimal efficiency with the utilization rate formula (resource) or with the flow formula? Ultimately, both perspectives are important to create as much value as possible at the lowest possible cost as an organization. Lean six sigma assesses both formulas:
Determining the value stream
A value streamlooks at all the activities that are required to actually deliver a product or service to the end user in addition to producing it (not only to produce it, but also to deliver it to the end user). It is then determined which activities add value and which activities do not add value to the process. Activities that do not add value to the process are also referred to as waste within the Lean Six Sigma philosophy. Waste occurs in various forms, such as defective products and long waiting times, as well as activity spent on waste. The internal waste logistics activity will be plotted in the value-flow model on the 'non-value-adding' side.
Waste logistics and reduce time spent
In order to achieve the highest possible efficiency, reducing the time spent on waste logistics is very relevant. By measuring walking routes using container tracking, among other things, it can be determined where improvements are needed. Milgro offers a method for this that has no impact on the primary processes. By analyzing exactly what the current walking routes are, it can be calculated which time is wasted on internal waste logistics.
Smart waste logistics ensures optimal walking routes
Based on the knowledge gained, advice is issued to shorten walking routes, or to reduce working time spent on internal waste logistics. Solutions are diverse, such as relocating central waste collection stations, but also applying other types of containers.
Result of optimal internal waste logistics
- Less labor time spent on non-value added activities
- Optimizing walking routes, improves the entire flow efficiency
- Employees have more time for the primary process
- Measurable savings on direct and indirect waste costs
Providing insight into and reducing the working time spent on waste management 'in the workplace' is one of Milgro's specialisms. In combination with, among other things, a smart, flexible and motivating collection structure and supported by full service & support, Milgro provides insight, overview and efficiency of waste management. This is wat we mean with smart waste management. We thereby realize measurable savings for our clients. Not only on the direct waste costs, but also on the indirect costs of waste management. It is precisely the reduction of (manual) labor in the waste process and the minimization of the number of logistic movements that offers opportunities for significant cost reduction.
Would you like to take a closer look at your entire waste process?
Request a waste scan.
Read more about the smart waste container in the trade magazine Warehouse Totaal (Dutch): Smart containers in logistics: 'The tenor was: as long as the waste is gone'.