5 Strategies to Reducing Waste and Improving Business Efficiency

Efficiency is one of the leading management concepts in the private sector. It’s different
from effectiveness and refers to ‘the ability to avoid wasting materials, energy, efforts,
money, and time in doing something or in producing a desired result. In a more general
sense, it is the ability to do things well, successfully, and without waste’ according to
Wikipedia.

Minimizing waste of resources amid high cost of goods and materials is very important since
using resources efficiently makes good financial sense and enhances the chance of business
survival. Here are 5 strategies to reducing waste and improving business efficiency;

1. Strict Monitoring of Business Processes

Business processes and tasks involve the utilization of materials, energy, efforts, money
and time in producing a desired result. Failure to adequately monitor how these
aforementioned variables are utilized on the one hand, and compared to the desired
output on the other hand, profitability may be elusive.

Business owners shouldn’t be satisfied with achieving set goals at the expense of huge
business resources. Emphasis should be placed on how to cut cost and achieve set goals
in an efficient manner. Organization members should take responsibility for every
mistake and wastage to instill sense of consciousness and curb incessant business
wastages.

2. Have an Effective Assets Tracking System

Digital asset tracking is gaining prominence in the business world and serves as a
critical tool for effective monitoring the physical location of every asset in the field and
in your inventory especially for companies that depend on large fleets of vehicles and
equipment.

With digital asset tracking, accounting errors arising from the use of spreadsheets and
manual counts when totaling inventories, asset values and customer billings are
minimized. Also, it’s enhances better auditing which reduces internal fraud, theft, and
financial mismanagement that can occur with inaccurate financial reporting. By keeping
tabs on business inputs, outputs, inventories, and assets, you can effectively manage
business waste.

3. Create a Conducive Business Environment

Creating a positive and productive work environment is critical to the overall success of
every organization. This is why, today, there is more emphasis on the needs of the
workforce than the needs of the organization. A poor business environment is
dangerous and wasteful.

Studies show that healthcare expenditures are nearly 50% higher at high-pressure
companies than other organizations. More than 500 billion dollars are attributed to
healthcare cost relating to workplace stress while 550 million workdays are lost to each
year to stress in the United States. This is massive.

Apart from medical expenditure, some employees could be seeking for legal rights as a
victim of poor and toxic business environment. At the short and long run, your business
could be losing precious time and opportunities as well as wasting financial resources.

4. Outsource when it’s Necessary

There are lots of business tasks, functions and activities hence it’ll be somewhat difficult
for our company to think that it’s good at everything. Truth is, there are business tasks
your organization can efficiently carry out and those it can’t.

The best approach in this situation is to outsource such tasks to experts in that area in
order to reduce cost and minimize wastage. You can outsource manpower recruitment
to a reputable recruitment firm. There are also haulage companies, SEO outsource team,
cyber security firms, purchase and supplies companies, IT support team etc. that can
provide cheaper and efficient services to your company. Outsourcing saves business
resources.

5. Adopt Performance Management

One of the best approaches to evaluate the effort and work performance of your workers
is through performance management. Truth is, the success and failure of an
organization is highly dependent on the performance of its workforce.

The big questions are; do you have a strong corporate culture? Are your employees
carrying out their assigned tasks efficiently? Is their work improving over time? Are they
mindful of waste minimization? Understanding your employees’ strengths and
weaknesses is a vital step to detecting deviations from set goals and putting corrective
measures to achieve organizational objectives.

By implementing performance management technique, you can effectively monitor

employees’ progress and easily detect errors and deviations that can cause your
company huge financial burden. Waste costs money, hence finding ways to reduce waste
could make your business become more profitable.