Efficiency improvement through waste minimization

The paper analyzes the problem of efficiency improvement through waste minimization. The term "efficient" is quite confused and often misused with the term "effective". In general, efficiency is a measurable concept, quantitatively determined by the ratio of output to input. "Effectiveness", is a relatively vague, non-quantitative concept, mainly concerned with achieving objectives. Efficiency corresponds to the level of performance that describes a process that uses the lowest amount of inputs to create the greatest amount of outputs. Efficiency relates to the use of all inputs in producing any given output, including materials, time and energy. It is an important attribute for all the activities, because all inputs are scarce. Time, money and raw materials are limited, so it makes sense to try to conserve them while maintaining an acceptable level of output or a general production level. Being efficient means reducing the amount of wasted inputs. Waste reduction is an important principle of Lean manufacturing, which is a business and production philosophy that shortens the time between order placement and product delivery by eliminating waste from the product’s value-stream. Lean manufacturing or lean production is a production practice, which regards the use of resources for any work other than the creation of value for the end customer, as waste, and thus a target for elimination. By the term “waste” is understood any activity that consumes time, resources, or space but does not add any value to the product or service. According to the analysis of scientific literature, there following basic common waste categories: over production, inventory, transportation, unnecessary movements, waiting, over processing, and defects. Based on the analysis of scientific literature, the authors of the paper propose a theoretical model illustrating the interrelation between waste minimization and efficiency improvement. The presented model consists of the following major components and stages: analysis of the processes for value creation; analysis of company’s performance indicators; waste identification and analysis; waste elimination; and processes’ reengineering and development. As waste is eliminated, quality improves, production time and cost are reduced, productivity and efficiency are improved and company gains a competitive advantage.Straipsnyje analizuojama įmonės veikos efektyvumo didinimo mažinant nuostolius problematika. Pirmojoje straipsnio dalyje pristatoma efektyvumo reikšmė šiuolaikinėje visuomenėje, efektyvumo sampratos analizė ir interpretacijos. Antrojoje dalyje pateikiama nuostolių, kylančių įmonės veiklose klasifikacija, analizuojamos nuostolių priežastys ir pasekmės. Apibendrinant nuostolių mažinimo ir efektyvumo didinimo koncepcijas, autoriai pateikia teorinį modelį, iliustruojantį įmonės veiklos efektyvumo didinimo galimybes, mažinant nuostolius