In the manufacturing industry, waste is created when demand and supply fail to match at a given time. One cause may be that a company manufactures too many products due to failed planning.
Sometimes quality fluctuation occurs and renders specific units unfit for normal sales at the normal rates – or for sales at all. In the latter event, all the raw materials, work, energy, infrastructure and technology used to make the product simply go to waste. On the positive side, production planning and shop floor management solutions provide multiple tools for minimizing manufacture-related waste.
Production planning ensures efficient use of raw materials and optimization of storage
Waste bears significant environmental and financial importance in all lines of business, but are particularly pronounced in the food industry, where both raw materials and end products have specific, limited shelf lives. The food industry rests largely on prediction-based planning and oftentimes demand must be predicted even a long time ahead. With products of animal origin, for example, we arrive at value-based reflections. Animal-originated raw materials should be used with particular respect and we should aim at the highest possible utilization ratio.
Read blog: When to move beyond excel in production planning?
When minimizing wastage, the whole chain from primary production up until the end users must be accounted for. When a product can be manufactured and finalized for sales as smoothly as possible and it moves quickly in the supply chain, it also ends up with the consumer with as much shelf life left as possible. In these cases, we approach the ultimate goal: avoiding wastage throughout the chain.
The raw materials or forestry and wood processing industries also deteriorate although the time cycle is different from that in the food industry. Sawn timber only keeps its premium quality for a specific period in intermediate storage while varying weather conditions cause their own risks on final products in outdoor storage. Another typical consideration arises from the fact that logs of various sizes should be sawed as efficiently as possible in order to create as little excess saw waste as possible. A log can be sawed in multiple ways, so finding the optimal way brings genuine advantage both ecologically and in financial terms.
The mechanical engineering industry also involves specific kind of waste. Metal does not deteriorate or perish as such, but waste is created if raw material use is less than optimal and through defective units arising from challenging and often largely tailored production. With unbalanced demand and supply, it is also possible to end up with too many pieces of a specific product having been manufactured either to an intermediate phase or as final products. In this event, the products take up too much storage space. The manufacturer may be forced to dispose of them or sell them off cheap for the sole reason of needing the workspace or storage for products that move faster in the cycle.
Mind the ecology, economic benefits will follow
When aiming to minimize waste,a well-suited production planning system comes in very handy. The system helps to see the actual status of the production easily and in detail, with any related raw materials, processes and output. The production process cannot be optimized and waste minimized without first identifying the relevant improvement targets.
One of the specific purposes of a production planning and shop floor management system is to help the manufacturer company find a balance between demand and supply. Specialized software can prepare detailed demand forecasts based on the demand in previous seasons and years. In addition, it is possible to streamline production through improved production processes, including optimized raw material use, better phase planning as well as efficient storage and logistics.
In many fields, products also need to be easily traceable. In the food industry, for example, detailed information printed on the product package on the origins of the raw materials can also bring competitive advantage. Improvements in production planning in the food industry improve the efficiency and timeliness of the processing while also respecting the raw material and optimizing both storage and package management.
Our cooperation with the renowned Finnish food company Snellman Group and improvements in their daily planning have reduced Snellman’s freezer storage requirement by over 20% and waste due to inadequate shelf life by 25%. While accomplishing this, we also managed to go into further detail with Snellman’s optimized raw material demand at the early stages of the process.
In addition to environmental considerations, it is of course noteworthy that waste also always involves financial loss. The good news is that ecological and economical benefits often run the same paths. When you take steps to minimize waste, both nature and your financial department will thank you.
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iPes by Pinja - Production planning and supply chain management system
Blog: When to move beyond excel in production planning?
Guide: FAQ: Production planning system adoption
