Waste Minimisation in Glass Processing - Part 3 Assessing Performance

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Finding hidden costs

The total cost of waste is generally around 20 times the first estimate that a company makes. Most of these costs are hidden and companies simply do not consider them when looking at the cost of waste. A first step in assessing performance is finding the true cost of waste. The 'true cost' of waste is not only the cost of the raw materials but is also a function of how much added value has been put into the product before it is lost from the production process.
For example, if a product is broken in the goods-out department, causing it to be lost as waste, the true cost of that waste will be:

True cost of waste = Cost of wasted raw materials + lost time + cost of utilities used + waste treatment + disposal costs.

To find out the current costs and performance, use the table at right. The information needed should be easy to obtain:

• Use existing accounts records for raw material purchases.
• Use production records to find out how much glass is used, rather than how much is ordered and delivered. If more than one type of glass is used then use additional lines in the table.
• For the main glass process wastes, include edge trimmings, off-cuts and damaged finished product.
• Use waste transfer notes (a legal requirement) to find out how much solid waste has left the site and invoices for waste disposal costs.
• Companies or suppliers covered by the packaging waste regulations will already have data on packaging use.
• Use utilities bills to assess and record energy and water usage.
• Tip - always check that the correct tariffs have been applied and that any Power Factor correction equipment fitted has been switched on!
• If you do not have all the data to fill in the table then the accounts department can provide details of materials and services bought, product sold and waste disposal costs. If in doubt, estimate the appropriate number - it is better to have an informed estimate than no estimate at all.

The ‘true total cost of waste’ will probably be between 5 to 20 % of turnover and will come as a shock to many people. The cost of waste is often a deciding factor between not only profit and loss but also between success and failure. A formal waste minimisation programme can save up to 1% of turnover from effective and low cost waste minimisation efforts. These are substantial gains.

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If you don’t measure it then you can’t manage it.

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Benchmarking

Production performance in the glass fabrication and processing industry is often measured by overall output and 'due date'. Using performance measurements directly related to process efficiency and waste minimisation will improve overall control and help to develop good practice.

Examples of performance benchmarks include:

• cutting yield.
• glass waste/tonne of saleable product.

These types of performance benchmarks should be used to monitor internal improvements from the waste minimisation programme.

Next steps

• Calculate the true cost of waste on a regular basis as part of Board level reporting - it is done for labour costs, why not do it for the much larger ‘true cost of waste’?
• Contact the Helpline (0800 585 794) for free publications and improvement ideas. If your company has fewer than 250 employees, ask the Helpline for a free Fast Track visit to help you get started.
• Get a copy of GG263 ‘Waste minimisation in the glass and glazing industry’.
• Get a copy of ET30 ‘Finding hidden profit - 200 practical tips for reducing waste’. Download a copy from here.

The "Waste Minimisation in Glass Processing" series is designed to give glass processors an insight into how to minimise wasting  valuable resources. The series is being published in Glass Age on a monthly basis and published here after the Glass Age publication. The series is:

Part 1: The Business Reasons 
Part 2: A Waste Walk Around and Action Plan  
Part 3: Assessing Performance (This Section)
Part 4: Improving Performance
Part 5: Waste Minimisation Tools

 

Download the complete series as an Adobe Acrobat file.

 

Last edited: 11/03/10

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