High material efficiency is one of the most important competitive factors. When identifying potential for increasing efficiency, the focus is often on the technical aspects of product development and production. But there is more potential in the holistic design of the entire value stream.
Increasing material efficiency is becoming increasingly important for German companies. The Federal Ministry of Economics and Technology (BMWi) has also recognized this. For this reason, since the beginning of August, small and medium-sized companies have also been able to use the innovation vouchers issued by the Ministry for qualified advice on increasing raw material and material efficiency. Up to 50% of the consultancy costs are covered. The external experts are then tasked with detecting material losses and making suggestions for improvement.
Comprehensive view of the processes required
In most companies, measures to increase material efficiency are limited to individual areas of the value stream: the technical or very material-related aspects of production. For example, the reduction of rejects (quality scrap) or the optimization of offcuts (flat scrap). Material-saving designs are also often taken into account. The focus is therefore mostly on the processes in the machines or on the handling of the materials themselves. However, there is also enormous potential for increasing material efficiency in the planning aspects of the value stream. Some examples are described below.
The diversity of product variants has a significant impact on material efficiency. A distinction must be made between internal and external diversity: Customers should be able to choose from a wide variety of products. However, the aim must be to keep internal diversity as low as possible through a high proportion of multiple-use parts. This is because an increasing number of component variants increases the number and quantity of raw materials, production and assembly parts and assemblies required. A smaller number of variants improves all these factors and also leads to better demand-oriented planning of products and production.
Component warehouse versus finished goods warehouse
If product variants are implemented with as many standard components as possible, the final variant development also takes place at a later stage in the value stream. If they are then assembled to customer order, this makes a double contribution to material efficiency: The high level of reuse directly reduces the risk of scrapping due to requirements that are no longer needed (obsolescence risk). The late creation of variants reinforces the effect, as the stocks required for reasons of delivery readiness and the associated risk of scrapping can be reduced.
If the machinery used causes high set-up costs and possible running-in scrap, large batches are often produced for reasons of cost and material efficiency. These may also be necessary if production capacity is limited because no capacity should be lost for set-up. However, large production batches lead to significantly higher inventories and thus to a higher risk of scrapping. High circulating stocks also occur when more is produced than necessary for reasons of capacity utilization. The result: the annual inventory-related material efficiency losses are between 5.5 and 9% of stock, meaning that more material efficiency is quickly lost through stock build-up than is gained elsewhere through measures to reduce material losses.
The three examples show: Material efficiency must be viewed from both a technical and logistical perspective. There are many starting points for improving material efficiency. Some of them merely shift at least part of the material efficiency loss in the company’s value stream. Therefore, the focus should always be on the overall process and overall material efficiency and not just on technical aspects. Two of the most important logistical levers are the architecture of the value chain and demand-oriented scheduling, as this minimizes the risk of rejects due to missing requirements or planning errors (incorrect scheduling scrap).
Material losses could be reduced by 29
In the eleven material efficiency projects funded by the BMWi and carried out by Abels & Kemmner to date, material losses have been reduced by a maximum of 29%. This corresponds to annual savings of several hundred thousand euros. Most material efficiency projects are therefore self-financing. Nevertheless, the BMWi’s funding is correctly positioned because it is the only way to encourage many entrepreneurs to evaluate dormant potential.
