Shrinkage is the percentage or amount of loss or gain (of product, energy, money...) at each stage of the production process as a deviation from the expected consumption of each material used to manufacture a product. To make a correct control of shrinkage and reduce it, it is necessary to plan production properly and measure the losses or gains at each stage.
In this way, we can quantify the cost of losses or savings and determine the most frequent causes, including expiration, breakage, overproduction, improper processing, administrative error and theft. In addition, reducing shrinkage also contributes to environmental protection and a more responsible and sustainable use of natural resources.
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What is shrinkage and what causes it?
Production shrinkage generally refers to the loss or decrease of materials, inputs, outputs or resources that are generated during the production process and may include theft or unnecessary energy cost. A shrinkage gain can also exist when we produce a product using fewer material resources than those defined as standard in the system.
When a company produces goods, it is common for waste to be generated due to different factors such as human error, technical failures, misuse of machinery, waiting times, errors in the definition of standards, among others.
This decline can be of various types, from materials in the manufacturing processfrom materials in the manufacturing process, the reduction of by-products from a raw material, to the loss of energy during the manufacturing process.
A company must take into account the amount and types of shrinkage that are generated in its production process, as these significantly affect production costs, product quality and the economic performance of the organization. It is important to identify and measure waste in order to take preventive and corrective measures, such as optimizing process efficiency, improving production systems and recycling waste to avoid its negative impact on the environment. It also helps us to detect errors in the creation of bills of materials or routing sheets and to detect the reasons for loss.
The decrease in production can have several causes:
- One of them is poor production planning, which can lead to over- or under-production, which can lead to over- or under-production.
- The lack of proper maintenance of machinery can lead to failures and production stoppages.
- Human error is also human error in the process, such as lack of training or non-compliance with safety measures.
- The errors in product design or customer service or in customer service can cause production problems and decreased demand.
- Problems of machinery or energy resources. In other words, an excessive, disproportionate and unnecessary cost or action.
- Errors in the definition of BOM or routing standards
How shrinkage is controlled in food plants
The shrinkage in a food plant is the amount of raw material or final product that is lost during the production process. For the control of production shrinkage and avoid and avoid economic losses, it is important to implement prevention and control measures.
One of the first measures is to keep an exhaustive ronitoring the quantity of raw materials used and the final products obtained. and the final products obtained. This will make it possible to precisely identify the areas where the greatest losses occur and to take measures in time.
Another key aspect is to ensure correct correct storage management and conservation of raw materials and products. To this end, it is essential to follow the manufacturer's specifications and establish a stock control system.
It is also possible to can also be reduced by proper production planning, avoiding production, avoiding overproduction, and optimizing packaging and labeling processes, among others.
Finally, it is important to to sensitize the work team to the importance of the importance of controlling shrinkage and fostering a culture of prevention and continuous improvement.
How to reduce production wastage
Production shrinkage can be reduced in several ways. One of the most effective ways is optimizing production and logistics processes. This is achieved by implementing a process management system. process management control over inputs, processes and finished products.
It is also possible to use performance analysis methods can also be used to identify can also be used to identify points of improvement in the processes.
Another strategy is to implement an inventory effective inventory management system to optimize inventory levels and minimize leftovers. In addition, it is important to evaluate product demand and adjust production accordingly to avoid surpluses.
Finally, practices and processes can be optimized, practices and processes for handling and storing materials and Finally, practices and processes for handling and storing materials and products can be optimized to minimize losses due to deterioration or expiration.
All of the above will make it possible to reduce production losses and obtain a better yield from the resources used, which will translate into benefits for the company and a lower environmental impact.
Types of shrinkage
Shrinkage is part of the production process in any company, and refers to the amount of material or product that is lost or gained during this process due to quality problems and waste or errors in standards.e lost or gained during this process due to quality problems and waste or errors in standards. There are several types of production shrinkage, here I will mention some of the most common ones:
- Production shrinkage: are those that occur during the manufacture of a product, such as, for example, the surplus of materials after a cut. These can be classified as process waste or material waste.
- Storage shrinkage: these occur when a product or material is stored and deteriorates or is damaged during the storage period, either due to lack of control of temperature, humidity, light, etc.
- Transportation shrinkage: Is the amount of product or material that is lost in transit from one place to another, either due to damage during transport or loss in transit.
- Quality shrinkage: These are the shrinkage caused by flaws or defects in the products manufactured. For example, products that do not meet the quality standards established by the company, that are not in the proper packaging and labeling conditions, etc.
- Shrinkage due to errors in standards. It is not infrequent that errors are generated when defining material standards, which causes serious problems of stock mismatch. It is quite difficult to detect it before reaching the stock breakage. It is therefore essential to control consumption in real time during the production process.
In conclusion, it is essential for companies to manage and control production wastage properly. control of production shrinkage, as this can have a significant impactThis can have a significant impact on the profitability of the business. Therefore, it is important to implement measures to avoid or reduce shrinkage, which may include improvements in production processes, in the quality of materials and products, in the control of materials and products, and in the control of production costs.This can include improvements in production processes, quality of materials and products, storage and transportation control, among others.
Assistant to Commercial Management at MESbook.
Arturo Torres
Industrial engineer with more than 27 years of experience in different sectors as operations manager, Supply ChainProcesses and Quality. Lecturer at institutions such as the Chamber of Commerce and the General General Council of Industrial Technical Engineering of Spain.
