Hidden waste problems are common when a business expands faster than anticipated, as the logistics of handling it fall short. There are various types of waste that can build up and cause major issues for any company, not least fines. So what are these problems that fast-growing companies should watch for? From supply chain issues to marketing waste, here are 5 unexpected waste problems your growing business can experience.
By Team Savant
Image: Frames For Your Heart
Excess Inventory and Dead Stock
One of the biggest challenges for a fast-growing business is stock and inventory management. When the good times roll, it’s easy to get carried away and order pallets of product, but things can change pretty quickly due to demand. When this happens, you can be stuck with more inventory than you need, and the only solution might be local skip bin hire, as was the case with Funkopop, to remove and dispose of the stock your business can no longer sustain.
Inefficiencies in the Supply Chain
Scaling logistics to include more of the supply chain within a rapidly expanding business infrastructure is a common method that many fast-growing companies use. However, not all are aware of the waste that this can produce. For example, without streamlining the logistics to meet supply chain demands, increased shipping costs, slow-moving transit and excessive packaging can waste resources, time and money, in addition to producing physical waste.
Digital Hidden Waste Problems
Going digital is considered one of the best ways to reduce a company’s environmental impact. But have you considered that it actually produces its own type of waste? Sure, the right software will help keep your business running smoothly, but globally, over 62 million tonnes of waste is produced from the physical infrastructure that digital solutions need. Additionally, you can also create fragmented tech stacks with disconnected systems that waste time and funding.
Marketing and Customer Acquisition Waste
One of the biggest mistakes a fast-growing business makes is in customer acquisition, where customer retention is a better opportunity. Of course, a growing business needs new customers, but in most cases, it is the existing loyal customers who sustain a company. Without realising this, many rapidly expanding organisations increase funding on ineffective marketing that wastes company time and money without a stable return on ad spending (ROAS).
Operational Bottlenecks and Labor Churn
Where specific processes work for a smaller-scale business, they may not work as the company scales. When a company scales very quickly, it can do so without first implementing a system that can facilitate the rapid expansion, resulting in bottlenecks in production and productivity. Of course, many operational processes can be automated to assist with manual and repetitive tasks, but in the meantime your brand can lose funding on training newly recruited employees.
Summary
Excess inventory and stock are examples of the hidden waste problems that rapidly expanding companies can face. There are also physical waste issues that arise from digital transformation, such as old devices being replaced, as well as outdated software subscriptions that waste money. However, a business can also face bottlenecks without a support infrastructure.