Checklist On Types Of Waste Activities In An Organization
Overhead should be analyzed to determine its components so that we can identify what is wasteful.
So what is waste? Waste is anything other than the minimum resources of people, machines, or materials that add value to products.
Append below are some waste activities which should be identified for improvement the profit level and enable the organization to maintain competitive pricing:
- Scrap
( amount of unplanned material which is not recoveredВ and therefore disposed of.);
- Rework
( the dollars associated with correcting non-conforming product);
- Warranty
( the cost associated with items which are returned by a customer for correction of non-conforming product. Should include the expense to make the correction, replacement cost and freight);
- Machine downtime
( cost associated with unplanned or unexpected downtime. Should include the emergency maintenance cost and the lost of product cost);
- Purchasing lead times
- Long Set-ups
- Absenteeism
- Supplier deliquencies
- Change orders-Purchasing and Engineering
- Equipment imbalances
- Inspection backlogs
- Paperwork backlogs
- Managing Payables (Creditors) – Checklist
- Balanced Scorecard: Examples Of Internal Process Perspective KPI
- Types of Activity Measures & Activity Cost Pool And Corresponding Activity Measures
March 5, 2007
Posted in: MANAGERIAL ACCOUNTING
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