9 Common Causes of Workplace Waste

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In simpler times, all a company had to do was ensure its revenue streams were consistent and success would follow. But with the economy more unpredictable and competitive than ever, organizations have since looked internally to examine how costs can undermine their overall performance. This is especially true in procurement, which if done properly, can reduce costs to cut down on any negative budgetary impact. However, there still are many other causes of workplace waste. Here are nine common things you might be squandering workplace funds on as well as ways to avoid workplace waste in the future.

High Absenteeism

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Employees missing work due to poor health can be detrimental to your operations. One way to curtail this trend is to introduce a medical benefits package that’s fits your employees’ needs. Managers should also examine the workplace for any hazards that may contribute to illness, such as asbestos tiles or poor heating and ventilation. On a personnel level, consider the culture in the department. Is stress brought on by overworked employees? Could morale issues be a contributor to absenteeism? If those signs are present, take steps to eliminate factors that might contribute to a negative environment.

Excessive Use of Paper

The average office worker uses up to 10,000 sheets of paper annually, which adds up to the fact that 3.7 million tons (or 700 billion sheets) of paper is purchased in the U.S. every year. Look at ways to use email more effectively to see if you can cut down on paper use. Create PDF versions of documents to easily send over email, considering paying employees through online services rather than printing cheques and only send snail mail when you have to. To deliver larger electronic items, consider delivering them via Dropbox or WeTransfer. If you must use paper, try to reuse sheets or print on both sides.

Mounting Storage Costs

Never mind the cost of paper. What about where you’re going to put it? Matt Petersen, president and CEO of eFileCabinet, states that a four-drawer cabinet holding up to 20,000 sheets of paper costs $2,000 annually to maintain. What’s more, cumbersome file cabinets and cupboards full of paper can take up valuable office space—real estate that could otherwise be capitalized on, especially if a company is planning to expand its workforce. It makes sense to go paperless to save time, space and, of course, money.

Too Many Departmental Purchases

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One of the most common examples of company waste involves unnecessary departmental purchases. It’s a costly practice which results in an excess inventory of supplies, not to mention a considerable duplication of spending. To curb that excess, consider consolidating common purchases such as paper, folders, staples and sticky notes under the jurisdiction of one company department. That department should be responsible for ordering supplies on behalf of the whole organization. You should also make sure to check what’s currently available in your supplies storage before putting in a purchase request for new items. You may be surprised at just how much stuff you have tucked away.

Playing Favourites With Suppliers

While you want to have a good relationship with your supplier, shutting the door to other providers may mean missing out on deals that might improve your company performance and help your budget. Set sentimentally aside and position yourself to make business decisions that are the most rewarding for your company.

Prioritizing Price Over Quality

The urge to buy as cheaply as possible is often hard to resist; after all, it does look great when it comes to meeting your budgetary constraints. But smart purchasers recognize other factors in their decisions, such as quality. If the price tag is indicative of a cheaply-made product, that may be reflected in the quality of your company’s output and the potential for defective orders to wreak havoc on production. To avoid unpredictable costs in the long run, remember that prices are sometimes low for a reason. Look to match value with quality by considering whether a supply company can offer discounts on bulk orders of higher quality goods.

Failure to Implement Beneficial Software

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It’s important to take advantage of technology that might benefit your company in the long run. If you’re in the procurement industry, examine how some of these software features (such as the technology provided by Procurify) can help you. Procurify helps you find new suppliers and better prices, speed up the timeline from ordering to delivery, use mobile features to make purchasing decisions anywhere in the world and assess the impact of supply orders on company budgets. Such an investment will help ensure operation stability in an uncertain economy.

Poor Project Management

As your company grows and you start to gain employees, it’s easy to lose track of who’s doing what. The problem with this is that many of your employees may be unwittingly working on the same tasks, resulting in wasteful job duplication. Remedy poor interdepartmental communication by standardizing the protocol regarding particular project responsibilities. Consider introducing team management software, check out 10 Tools Highly Effective Managers Use that allows employees to see what their peers are working on.

Too Much Outsourcing

If the company workload is rising, managers looking for the easy way out might want to hire new personnel or outsource the job. The problem with this is that a new hire will need time to adjust to your company’s operations and outsourced personnel may be unfamiliar with your work culture and the workflow process. Because of this, too much outsourcing could result in errors that cost the company time and money. Smarter managers often prefer to restructure the workflow so that any additional jobs are distributed more evenly throughout the company, placing less priority on either hiring or outsourcing. That said, outsourcing can be helpful in certain areas, so be sure to weigh the odds.

Poor purchasing and managerial habits can have a detrimental effect on your company’s performance. But if you place an emphasis on knowing where your dollars are going, discovering what can be eliminated and allocating funds to areas that need them the most, elimination of waste will likely smooth your organizational workflow and boost your returns in the long run.

Feature Image: amst / Shutterstock

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About Author

Kenneth Loi

Kenneth is Chief Operating Officer and Founder of Procurify and oversees several business divisions including Operations, Product Management and Customer Relations. Kenneth's vision is to assemble the dream team to help build an enterprise product that helps solve critical business problems yet is intuitively easy to use.

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