Working to ensure the company generates profit is just one of the pillars supporting operations. Beyond that, it is necessary to evaluate losses, check process quality, and identify any flaws that may prevent the business from profiting and growing even further.
In this context, so-called loss management must be part of the organization’s routine. This concept is responsible for directing a series of resources and activities toward identifying and correcting inconsistencies that waste inputs, time, and cause financial damage.
Want to know how to perform good loss management? Then follow this post and discover how technology can help you with this important task.
What losses are we talking about?
Within a company’s routine, losses can be manifold. From raw material acquisition to delivery to the final consumer, there are different stages that, when poorly executed, can interfere with delivery quality. Let’s look at them:
- Commercial losses: occur when the item is not available for sale, such as improper packaging, damage, inventory replenishment errors, supply delays, etc;
- Administrative losses: caused by flaws in the company’s internal management and processes. This includes waste of supplies, poor personnel and inventory management, among other points;
- Productivity losses: generated by poor execution and process control, such as rework, slowness, operational errors, lack of team training, etc;
- Financial losses: represent damages from default, financial out-of-control situations, fraud, fines, payment method inefficiencies, etc.
How can technology improve loss management?
The central point of optimizations brought by technology concerns information and process control. Today, through computerized and integrated systems, managers have all the data they need to control the company’s production stages.
Thus, there is improved communication, and the identification of bottlenecks, operational errors, and points of attention happens in a deeper and more systematized way, reducing response time with the necessary solution to the problem.
In this context, equipment, customized software, methodologies, and other solutions help reverse the scenario of losses. See some examples below.
Management systems
This type of system centralizes company management, giving total visibility of processes to those who manage them. Thus, delivery quality begins to be monitored in a single location, but with a global reach of the business.
Currently, there is already significant talk about ERP, TMS, and many other systems focused on business managerial performance. All of them assist in essential points such as production, inventory, finance, personnel, and even customer relationship management.
In addition, it is possible to adopt a highly relevant strategic differential: customized systems 100% adapted to the company’s reality, which work with the most useful information to optimize operations and generate a successful experience.
Automation
Automation is by far one of the main allies of business management. Likewise, it is also an ally of loss management. Today, since a large part of companies’ production chains is supported by computing and automated systems, any alteration that may represent some type of loss is easily identified.
At this point, methodologies that favor operational excellence, such as ‘just in time’, find fertile ground in computerized environments. In this sense, resources like MRP (Material Requirement Planning) can also be used more efficiently, as well as CIM (Computer-Integrated Manufacturing).
Conclusion
Loss management is one of the branches of business management most closely related to the organization’s profitability and operational efficiency. Neglecting this important measure is, undoubtedly, missing the opportunity to improve business processes and make it even more profitable and competitive.
Did you like this post and want to keep learning? Also check out our article on information management and learn how to put it into practice in your company!
