Waste directly hits your bottom line. You invest money, time, and effort without increasing the value of your products or generating revenue. You can save many thousands of dollars by reducing waste.
Many manufacturers accept waste as a normal cost of business. One Parellax client (a medium-sized 1,500 person woven-wear manufacturing factory in China) analyzed its waste at every step of the manufacturing process, from sample making, material receiving and inventory, through cutting/knitting, sewing/linking, and finishing, to packing. They found waste at every stage.
Here are their findings:
Sample production waste:
1. Mistakes in design communication
2. Craftsmanship problems
HK$300,000 per year wasted!
Cutting floor waste:
1. Wrong color or shade
2. Fabric faults
HK$ 350,000 per year wasted!
Sewing department waste:
1. Machine problems
2. Faulty craftsmanship
HK$ 600,000 per year wasted!
HK$ 80,000 per year wasted!
Problems detected during final inspection:
1. Ironing problems
2. Measurement problems
HK$ 150,000 per year wasted!
This is almost HK$1,480,000 per year but actually it understates the problem. The worst waste is the problems you do not detect and that you ship to your customers resulting in customer claims and lost orders.
Should an annual waste of 1.5 million HK$ be an industry norm?
Do we accept this as an industry norm or can we automate and streamline processes to reduce waste? In the 1970's, Toyota imposed an industrial management concept, known as TQM (Total Quality Management):
1. Commit to achieve a high quality product and customer satisfaction.
2. Aim to identify and eliminate product defects.
4. Design a process to address all quality problems at every step of production.
5. Analyze and implement methodology to improve the quality.