We work to eliminate waste
Eliminating waste is one of our major goals. As already explained in this page, we almost obsessively try to reduce any kind of waste in wood processing and transformation, and we do it considering both raw material and processes. We only produce what the customer needs, thus gaining many benefits, such as shorter delivery times and greater sustainability. Among the words associated with greater environmental awareness, there is one that caught our attention which is precisely about waste reduction: the Japanese word Mottainai.
Mottainai, the Japanese word against waste
The word Mottainai conveys a sense of regret over waste, a deep disappointment that a person feels when something valuable is wasted. On this page about Japanese culture, you can read that “the cultural roots of this term can be found in the geography of Japan. The Land of the Rising Sun is a densely populated island and for this reason it may have to face resource depletion in the long term. We can therefore assume that this pillar of social common sense was born out of a need that was anything but spiritual, i.e. the preservation of the environment”. This word has therefore acquired a value related to sustainability and the environment.
Fighting waste: let’s start from our warehouse
Fighting waste is a daily commitment for us and the word Mottainai is therefore a value that is intrinsically present in our activities and in each phase of the production process, starting from the warehouse management. Companies rarely know how to define the costs of warehouse management, and many of them work on the wrong assumption that having accounting reports to monitor costs is enough. However, the real costs for the warehouse management include many other factors apart from the goods sold and raw materials, e.g. the costs for management and maintenance, insurance, interests, shrinkage. These costs may vary depending on the business field but are always pretty high on average. It is estimated that the carrying costs alone represent generally 25% of inventory value on hand.
Here below you can find some estimates on the costs taken from a very interesting article by Lokad.
- cost of money: 2% – 5%
- taxes: 2% – 6%
- insurance: 1% – 3%
- warehouse expenses: 2% – 5%
- physical handling: 2% – 5%
- clerical & inventory control: 3% – 6%
- obsolescence: 6% – 12%
- deterioration and damage: 3% – 6%
Benefits of reducing inventory
We have decided to optimise our inventory, thus reducing capital, carrying, and risk costs. This decision is directly connected with our “pull” method, which means that: we plan production according to the orders from the clients; the warehouse is replenished after consumption depending on the downstream production capacity; the stock sizing is defined in advance; and the flow is driven by the client who is at the centre of all our activities. We use the Kanban method to avoid overproduction.
The Kanban method allows us to save space in the warehouse
This Japanese method allows us to make the phase of raw material supply and replenishment more efficient. Thanks to it we can receive the raw material we need at the right moment, with the final objective of aligning the production capacity with the demand, thus avoiding both overproduction and unnecessary waiting between a process and the following one. This represents a huge advantage both for us and the client, in terms of sustainability and economic saving.