Few words generate as much rejection in a plant as "shrinkage". They are losses. Sometimes visible, sometimes invisible. And although they are taken for granted in day-to-day industrial life, they have a direct and often silent impact on companies' profit margins.
From the food industry to the chemical and logistics sectors, shrinkage is a constant threat. But today, thanks to industrial technology, detecting and reducing them is more feasible than ever. In this article, we look at how tools such as MES and ERP systems are helping factories to produce more efficiently, with less waste and greater control.
Industrial shrinkage represents losses of raw materials, semi-finished or finished products during production, transportation or storage processes. Although they seem unavoidable, their financial impact is significant: they raise the cost per unit produced, reduce overall efficiency and directly affect the company's profitability.
Detecting, measuring and controlling shrinkage is essential to any process optimisation strategy. And with industrial digitalisation, it is now possible to manage them more precisely and in real time.
In any industrial environment, shrinkage does not occur in a single form, but has different origins and consequences. Understanding their typologies is fundamental to defining effective reduction strategies. In general, they fall into three main categories: natural shrinkage, technical shrinkage and management shrinkage.
These are unavoidable losses resulting from the behaviour of the materials themselves, such as evaporation, oxidation or expiration.
These are generated by the normal use of machinery and processes. They include cutting waste, line adjustments or calibration failures.
This is the most avoidable and costly: human error, poor inventory handling, inaccurate records or failures in planning.
Identifying the predominant type of waste is key to prioritising actions: while natural wastage is mitigated, technical and management wastage can be significantly reduced.
Industrial waste is not the result of chance. In most cases, they are caused by recurring failures in management, maintenance or planning. Identifying these causes allows companies to anticipate, correct inefficiencies and prevent small errors from translating into large economic losses. The following is a review of the most common factors that generate shrinkage in the production plant.
Lack of demand forecasting or overproduction causes surpluses that end up deteriorating or becoming obsolete.
Poor stock rotation, errors in physical counts, and inadequate temperature or humidity conditions are responsible for a large part of the losses.
Incorrect adjustments, deficient maintenance or quality control failures generate defective products and unnecessary waste.
Most industrial waste comes from avoidable failures in management, which shows that prevention and digitalisation have a direct impact on reducing shrinkage.
Shrinkage reduction no longer depends solely on good manual practices or periodic reviews. Today, Industry 4.0 provides factories with digital solutions that allow them to monitor, analyse and correct any deviation in real time. Tools such as ERP systems, MES and IoT technologies offer a comprehensive approach to anticipate waste, improve traceability and increase the profitability of production processes.
An ERP specialised in manufacturing allows you to automatically record every deviation, analyse trends and link real costs to batches, shifts or production lines.
IoT sensors make it possible to monitor critical variables (temperature, vibrations, energy consumption) and anticipate failures. Together with advanced analytics, they facilitate predictive control that significantly reduces waste.
The MES system (Manufacturing Execution System) captures data directly from machines and operators, ensuring traceability and early detection of waste. Its integration with ERP offers a complete view from the office to the plant floor.
Our MES / MOM systems are specialised in industrial environments that allow:
Industrial digitisation with ERP, MES and IoT transforms shrink management: from reactive control to real-time monitoring that prevents losses before they occur.
Beyond technology, reducing industrial shrinkage requires a holistic approach that combines planning, operational discipline and organisational culture. Companies that apply preventive methodologies and encourage the training of their teams achieve sustained waste reduction. The following are some of the most effective strategies that can be implemented in any factory.
Adjusting production to actual needs avoids overruns and reduces storage costs.
Training operators in good handling practices, quality control and the use of digital tools is key to minimising errors.
Adopting lean methodologies helps to constantly review processes, eliminate inefficiencies and reduce waste. Combined with digitisation, it enables higher efficiency rates to be achieved.
Practical strategies, combined with technology, allow you to sustainably reduce waste and align continuous improvement with profitability objectives.
Industrial waste is not an inevitable evil. With the right tools, it is possible to reduce waste, optimise the use of raw materials and improve factory profitability. Investing in digitalisation not only helps to control losses but also turns waste reduction into a clear competitive advantage in the market.
At Overtel, we help companies to reduce waste without complicating their operations, implementing Industry 4.0 solutions adapted to reality.
Do you want to know how much you could save by reducing waste in your factory? Request a free diagnosis.