A TDABC model for waste valorization under the Lean Management perspective

Abstract

Nowadays, companies are looking increasingly to the reduction of the non-value added activities in their production processes in order to become more competitive in today's very demanding markets. This competitiveness can be presented in terms of low manufacturing costs of the product. In this sense, it is critical to prevent unnecessary costs which will necessarily result in an increase in the price of the final product or in a reduced margin. This asks for a good knowledge of the production processes. Such knowledge allows to identify and subsequently reduce the activities that do not add value to the product. In this way, the proposal of this paper is to present and discuss cost equations for the computation of the cost with non-value added activities identified as waste by the Lean philosophy. A TDABC model has been used for this purpose. These cost equations for waste accounting were tested through data collected from the production process in a footwear company. The results obtained demonstrate the applicability and relevance of this set of cost equations to quantify properly waste in production processes contributing also to the design of strategies aiming to reduce such non-value added activities.