Waste can account for up to 30 per cent of the operating costs of a business. Unfortunately, waste is often simply accepted as the operating norm. Most businesses put their energy into increasing sales rather than looking for any waste reduction opportunities.
Step 1: Audit – complete a waste audit on your business to identify the wide range of waste issues within the organisation that, when addressed, will improve profitability. Go through your expenses, line by line.
Step 2: Prioritise – with so many issues requiring attention, the project of driving out waste can be overwhelming. Setting the priority enables the most important issues to be dealt with first.
Step 3: Teams – creating teams to drive the waste-reduction process (and remove the wastes) doesn’t just happen. It needs to be managed.
Step 4: KPIs – you need to establish key performance indicators (KPIs) before you start driving out waste.
Step 5: Repeat – when most of the waste has been addressed, this step then involves going back to Step 1 and repeating the process annually.
Katrina Brennan, Principal, SRJ Walker Wayland Business Growth Advisors, Accountants and Auditors, Level 2/2 Innovation Parkway, Birtinya, 5301 9957, srjww.com.au
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