Eliminating

Waste
Submission date: 01/12/08

Amais Chouhdary
Hashmat Arabzai
Hassan Kaid
Abdul Basit

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 Acknowledgements

We would extend our gratitude to the following individuals or

organizations:

 Mr Nassir Kazemian, Assistant manager, Havana Bakeries Ltd.

 Mr D. Parry, Human Resources, Asda, Cardiff.

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 Contents Page
1 Acknowledgements 2

1.1 Contents 3

1.2 Executive Summary 4

2.1 Introduction 5

2.2 Sources of waste in a large factory 6

3 Management systems to eliminate waste 7

3.1 Environmental Management System 7

3.1.1 What is EMS? 7

3.1.2 Benefits 8

3.1.3 Difficulties 8

3.2 Total Quality Management 9

3.2.1 What is TQM? 9

3.2.2 Benefits 10

3.2.3 Difficulties 10

3.3 Just-In-Time 11

3.3.1 What is JIT? 11

3.3.2 Benefits 11

3.3.3 Difficulties 11

4 Conclusion & Recommendations 12

5 Appendix 13

6 Bibliography 14

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 Executive Summary
Reducing waste has always been a profit opportunity; in today’s
consumer economic, ecological and regulatory environment it is
becoming a necessity.
For many companies, sooner or later, waste will become a survival
issue.

Accuracy, control, communication and attention to detail form part of any quality
improvement programme. Concentrating narrowly on finished product quality may
actually increase waste by increasing rejects at inspection.

Through the course of this report we intend to firstly highlight sources of waste in a
typical large factory and thereafter review management systems which could be
implemented to eliminate the sources and reduce waste. We will explore in particular
Environmental Management System including accreditation, Total Quality
Management as well as Just In Time production system.

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Introduction
There are literally hundreds of words for different types of waste each giving waste a
spurious air of respectability. Waste is anything other than the minimum amount of
equipment, materials, parts, space and worker’s time which are absolutely essential
to add value to the product.

Anything that does not add value to the product is waste.

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Sources of waste in a typical food factory
Invisible waste is the most common cause of invisible losses. For instance:

 Giveaway of over 1-2% is often tolerated but when an annual value is

established, it can be seen how this can hurt profits. In a chocolate biscuit
process underweight biscuits are brought up to target weight by increasing the
amount of chocolate. This can be expensive. Long count errors can occur
when a packet is held up in-flight causing a short-count followed by a long-
count. The short-count will be rejected by the checkwiegher, leading to rework
and packaging waste, while the long-count is given away to a lucky costumer.

 Most companies are faced with disposing of 1 - 2% of their output as obsolete

material which cannot be recovered back into production.

 Poor stock rotation can lead to waste through product becoming

out-of-date. A first-in-first-out (FIFO) system allows the product to
be dealt with in age order to minimise out-of-life stock.

 There is a common tendency in the make-to-order environment

to order more materials than required for the job – even after
allowing the standard amount for waste. This is typical of Just-In-
Case companies. The caution is often unjustified leading to
waste.

 Striving to avoid contamination can increase waste. Small amounts of

contamination in blending processes are inevitable. Striving to
eliminate contamination can lead to unnecessary waste. A food
company purged a line of 700 kg of a high-cost oil at each
changeover, believing that the oil was contaminated with a
different oil. In fact, the line contained only 3 - 4 kg of the
‘contaminant’ which was causing no problem whatsoever.
Cancelling the purge saved £100 000/year2!

 Not emptying the bags and containers properly results in waste of raw
materials. Often it is a matter of providing the right equipment, such
as shaking equipment for bags.

 Fork-lift trucks not fitted with the most appropriate handling

equipment, such as plates or rubber-tipped tines, driven by

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 inexpert operators do considerable damage by accidental
collisions, as well as in the course of handling. Storing materials
near fork-lift truck access routes adds to the problem.

Environmental Management System (EMS)

What is an EMS?
An EMS is a structured management tool that enables an organisation to identify and
manage its significant environmental impacts. Environmental Management Systems are
based on standards, which specify a process of achieving continually improved
environmental performance and complying with legislation.

To gain accreditation an external and independent body will review an organisation’s EMS. A
key principle of an EMS is the ethos of ‘continual environmental improvement’ and this will
need to be demonstrated during audits, reporting and reviews.

What is ISO 14001?

It specifies a framework of control for an Environmental Management System against which

an organisation can be certified by a third party. ISO 14001 is an international standard that
specifies a process for controlling and improving a company's environmental performance.

An effective EMS includes:

• An assessment of the organization's activities, products, processes and

services that might affect the environment.
• Development of an environmental policy.
• An environmental improvement and awareness programme.
• Written procedures to control activities with a significant environmental impact.
• Periodic auditing of the system to ensure effective operation.
• A formal review of the EMS by senior management.

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 Fig x.x Basic cycle of an EMS

Achieving ISO 14001 is just the start as once in place, the aim is to improve on it year on
year.
This is known as Plan – Do – Check – Act.

Although an effective EMS requires a thorough commitment from the top managers, all the
employs have a part to play and therefore representation from each layer of authority needs
to be involved in each of the above stages.

Most workforces do not see environmental issues as threatening. Indeed prompt attention in
this area can be highly motivating. A good manager will never criticise if waste is brought to
his attention and would encourage people to report waste problems as it is better to find out
later than never. This would lead to a more robust and thorough EMS that is embedded very
early on into an organisation’s culture.

Benefits:
An EMS identifies opportunities to reduce waste by defining environmental responsibilities
for all staff and building awareness of environmental issues among employees, as a result
increasing profits and reducing the risk of fines for non-compliance with environmental
legislation and minimise environmental liabilities. It also ensures all operations have
procedures to minimize their environmental impacts. Being accredited may lead to lower
insurance premiums in addition to demonstrating a good corporate image hence attracting
shareholders and investors.

Difficulties:

An EMS is not a small undertaking and requires the commitment of an organisation’s time
and money so top level commitment is essential. It can also be very costly as each phase
needs to be externally verified which adds to the expenditure. For instance, substantial work
is required to maintain certification potentially requiring educating staff, since a change in the
culture of the company is required to efficiently meet targets set in the policy. Cost of
maintaining certification needs to be taken into account. Overlooking this may lead to the
potential loss of certification.

It should not be forgotten that change is a major cause of stress amongst the
workforce and people like to stay in their comfort zone. Therefore all sections of the
workforce must be made to feel that they have a role to play in making this happen
and that it’s their agenda too. It’s in their interests and in the interests of the
organisation that the changes are made. Creating a clear, shared vision is essential,
a difficult but not impossible task.

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 Total Quality Management
What is TQM?
As defined by the International Organization for Standardization (ISO):

"TQM is a management approach for an organization, centred on quality, based on

the participation of all its members and aiming at long-term success through
customer satisfaction, and benefits to all members of the organization and to
society."

[ISO 8402:1994]

Unlike EMS, TQM is not a standard to which an organisation can become registered.
TQM requires that the company maintain quality standards in all aspects of its
business. It views an organization as a collection of processes. It maintains that
organizations must strive to continuously improve these processes by incorporating
the knowledge and experiences of workers. This requires ensuring that defects and
waste are eliminated from operations.

The simple objective of TQM is "Do the right things, right the first time, every time".

TQM is variable and adaptable but the key principles of TQM are:

• Management Commitment:

Plan, Do, Check, Act (recognize, communicate, revise).

• Employee Empowerment:

Training, Suggestion scheme, Measurement and recognition, Excellence teams.

• Fact Based Decision Making:

Statistical process control, Team Oriented Problem Solving

• Continuous Improvement:

Systematic measurement, Cross-functional process management, Attain, maintain,

improve standards.

• Customer Focus:

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 Supplier partnership, Service relationship with internal customers, Never compromise
quality, Customer driven standards.

Benefits:
Management can, at times, be a restraint to innovation through relying on historical
systems. If given the freedom to innovate each and every employee can contribute
to improve quality.

When mistakes are made by staff, it is rarely through a desire to make a mistake.
The system used is at fault. Instead of mistakes being hidden from management or
denied, and thus being allowed to blossom into larger less easily rectifiable
problems, they are tolerated and employees are encouraged to try again.
Employees begin to develop a commitment to the organization rather than looking at
it as just their employer. When employees feel they are an integral part of the
organization, they feel needed and enjoy work more, which further increases service
quality.

Multifunctional teamwork allows a better understanding of arising problems and

individuals will work with each other identifying causes of problems rather than
blaming each other for the results of a problem. This will remove the blame culture.

By involving your suppliers directly with your staff, two way communication can be
established. Any problems that arise can be solved jointly. This prevents waste
through returned goods for the supplier and the company expenses through
obtaining replacements from another supplier. Suppliers will be working with, rather
than working for, the business.

Difficulties:
Total Quality Management develops its own bureaucracy. TQM sceptics say its
statistical burden and committee structure slows organizational momentum, and
consumes too much time and resources.

Some argue, that although Total Quality Management calls for organizational
change, it does not demand radical organizational reform. Real quality improvement
requires radical structural change, such as flattening organizational structures. It
requires liberation of employees from control systems.

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 Just In Time (JIT)
Originating in Japan, JIT is a an operating philosophy which has as it’s basic
objective the elimination of waste. This is its continuing and perpetual focus.

Sometimes referred to as stockless production or lean production and is a suitable

production system when steady production of clearly defined standard products is
required. It seeks to achieve improvement in manufacturing productivity through the
principle ‘make only what you can sell when you can sell.’

JIT is usually implemented in an organization producing a high value product which

has flexible working practices and a disciplined workforce.

Good working practices in addition to the above assure product quality with
minimum, if any, defects as well as eliminating waste by reducing waiting, delays
setup and production problems.

Benefits:
JIT generally provides better quality products because quality is made the
responsibility of every worker, not just quality control inspectors. It significantly
reduces cycle times resulting in smooth production flow. Since the products are
manufactured as a result of demand there are reduced space requirements.

A smooth production rate also allows an improved relationship with suppliers

resulting in quality raw materials and components (zero defects) with guaranteed
delivery times as well as contingency plans to cope with unforeseen disruptions.

Difficulties:
JIT requires a high stable demand and since it is customer driven, too much reliance
on JIT may leave the company in chaos if considerable unpredictable fluctuations in
demand occur.

It also relies heavily upon suppliers to honour their contracts. Since it also requires a
disciplined workforce, training and changing the culture of existing employees may
present the biggest challenge.

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 Conclusion and Recommendations
Through the course of this report only some major sources of waste have been
highlighted and some solutions explored.

EMS, for example, would be well suited to a large organization with at least 200+
employees. EMS helps cut waste but more importantly reduce the organization’s
environmental impact. With environmental issues effecting costumers’ decisions
more than ever before, EMS and accreditation can increase costumer numbers.
However, for a small business the cost of audits may outweigh the benefits and EMS
may not be the financially viable option for cutting waste.

On the contrary, TQM, in our opinion, can be adapted to cater for any organization
regardless of employee count or turnover and can be implemented with little or no
capital investment.

JIT is appropriate for a production company with a fairly accurate sales forecast as
unpredictable sales may hinder the efficiency of the company, as discussed earlier. It
seems to be the better option for an organization with a regimented workforce.

Throughout our research we have established that every management system has
its drawbacks and no system can eliminate waste from every process of an
organization. However we have learnt that any organization, applying a mixture of
the management systems discussed, can run very efficiently and come very close to
zero waste. For example, a small business can benefit from EMS by internally
adapting the principles of EMS and reduce waste without hefty expense of audits
etc. A large company with fluctuating costumer demands and unpredictable sales
can still apply the JIT system albeit in some processes and minimise storage costs
etc, leading to a reduction in waste.

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 Appendix 1
ISO:
ISO (International Organization for Standardization) is the world's largest developer
and publisher of International Standards.

ISO is a network of the national standards institutes of 157 countries, one member
per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the
system.

ISO is a non-governmental organization that forms a bridge between the public

and private sector and enables a consensus to be reached on solutions that meet
both the requirements of business and the broader needs of society5.

ISO 14001: internationally recognised standard for EMS.

Strategic Advisory Group on the Environment (SAGE) was formed in June 1992 in advance
U.N. In the Conference on Environmental Development held in Brazil, SAGE concluded that
an EMS was a critical element in meeting future environmental needs worldwide and
recommended the formation of ISO Technical Committee in 1993 to develop standards. ISO
14001 Published in 19965.

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 Bibliography
1. Environmental Technology Best Practice Programme [June 1996]-
Tips for Reducing Waste (online)
http://www.tangram.co.uk/TI-Finding_Hidden_Profit_(ET30).pdf
[accessed 20/11/08]

2. Orr & Boss [1996] Towards Zero Waste: 101 Wastebusting Tips! (2nd edition)

3. Saylor, J. H. (1996). TQM simplified. A practical guide. (2nd edition) New York:
McGraw-Hill.

4. Bennis, W. and Nanus, B. (1985). Leaders: The Strategies for Taking Charge.
New York: Harper & Row

5. International Standardization Organization

http://www.iso.org/iso/about.htm [accessed 25/11/08]

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