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Problem

Explain the different elements of “waste” that exist in supply chains and how supply chain management focuses on eliminating the various elements of waste.

Step-by-step solution

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Step 1/3

Waste management is one of the major challenges that persist in supply chain management. Generally waste occurs because of ineffective supply chain management which often results from lack of coordination among the suppliers.

There are different types of waste that occur in supply chain management. The most common waste arises from lack of inventory management.

Step 2/3

Different types of wastes in supply chain management are given below:

• Deterioration in the value of a product due to lack of sales. Due to ineffective inventory management often it happens that a company is required to produce more goods in case of increase in demand, which often results in depreciation of value of the goods in case the products remain unsold.

• Wastage of valuable resources like labor costs, transportation costs etc., are consumed in the inventory management. These wastes often hamper the profits o the company.

• Wastage of time in transportation of delivery of goods and raw material from one place to another due to lack of coordination between the suppliers.

Step 3/3

Following steps can be taken by the companies in order to eliminate wastes in supply chain management:

• Establishing of warehouses at strategic locations so that the raw materials and finished goods can be transferred faster and in an inexpensive manner.

• Proper cooperation and coordination between all businesses parties involved in a supply chain could considerably reduce the wastage in the process of supply chain.

• The transportation facilities that are used in manufacturing a product could be used according to the type of product.

Thus, above given are a few types of wastes in a supply chain management and the manner in which these wastes could be eliminated.