Among the priorities of modern companies striving for sustainable development is the optimal management of resources. This is important not only in the context of work planning but also in increasing profits through efficient project flow and boosting operational efficiency.
Wasting corporate resources
Wasting corporate resources refers to the inefficient or suboptimal use of available resources by an enterprise, which leads to financial and operational losses and, over time, even reputational damage. When discussing resources, we refer not only to employee work hours but also raw materials, warehouse space, capital, and even data and information. Wasting these resources increases costs and, in turn, reduces the company's potential profit, negatively impacting competitiveness in the market. It is estimated that employees "waste" an average of 50 days per year (Teamstage 2024), which affects their productivity, project completion, and the overall budget.
Causes of resource wastage include:
- Inefficient operational processes: An example could be overproduction, which generates surpluses unnecessarily occupying warehouse space. In the USA, surveys show that 46% of respondents pointed to operational efficiency as the top business priority (Gitnux 2023).
- Improper planning and inventory management: A lack of precise demand and supply planning can lead to a situation where a company either has excess or insufficient stock, which may result in the wastage of raw materials or financial resources.
- Low employee engagement or insufficient training: 89% of employees admit to wasting time at work daily (Zippia 2023).
- Long or unnecessary meetings: It is estimated that meetings constitute 15% of total working time, with up to 50% of them addressing irrelevant topics (Goldenstepsaba 2024).
- Outdated technology: Maintaining outdated systems and technologies not only increases operational costs but also leads to reduced efficiency and higher resource consumption. 86% of entrepreneurs believe that technology has improved team communication, including remote work, and organizations using videoconferencing can save up to $11 million annually on travel costs alone (Goldenstepsaba 2024).
- Lack of automation: Employees waste an average of over 21 days a year performing simple or repetitive tasks (Zippia 2023), which increases project costs, causes frustration, and raises the risk of team burnout.
The ERP solution?
Implementing an ERP system allows for precise tracking and analysis of production processes, identifying areas where there is inefficient use of materials or excessive resource consumption. This enables quick implementation of necessary corrections, leading to increased efficiency and reduced production costs.
Advanced planning and forecasting functions available in ERP systems enable companies to align inventory levels with actual market demand. This helps avoid situations where excess inventory occupies valuable warehouse space and generates additional costs (and in the case of perishable products, the risk of expiration and the need for disposal).
It is worth noting that ERP systems can also contribute to optimizing energy consumption and other non-production resources. By monitoring and analyzing data related to energy use, companies can identify areas where savings can be made, such as through modernizing machinery or optimizing production schedules.
How to prevent resource wastage?
- Process optimization: Regular analysis and optimization of operational processes to increase their efficiency.
- Inventory management: Implementing advanced inventory management systems that help with precise planning and reducing surplus.
- Employee training and development: Investing in employee training and development to increase their engagement and the effective use of resources.
- Technology modernization: Investing in modern technologies and systems that can improve efficiency and reduce resource consumption.
- Monitoring and control systems: Introducing systems to monitor resource usage and control processes to identify areas of wastage.
- Reducing bureaucracy: Simplifying procedures and decision-making processes to increase efficiency and reduce time wastage.
- Effective space management: Optimizing the use of office and warehouse space to reduce costs and increase efficiency.
