OVERPRODUCTION Why Why Why


Lean Waste of OverproductionThe waste of overproduction, is the most prevalent of the seven Lean wastes. It is the most obvious, it is not hidden, and is seen by the responsible managers every day. Why are organizations unwilling to invest improvement time to reduce a prevalent waste? Is it because of Managers perception, being unapprised, or poorly trained?

Overproduction can happen in a production system of make to stock as well as make to order. Overproduction can be defined as the production of a commodity, product, or substance that is not wanted or needed by the next value transformation operation within a system.

Why should managers who are responsible for the efficient delivery of customer desired value be concerned about overproduction? After all we are all aware of various problems that could arise resulting in an operation having no WIP to work on. Why does this common misbelief remain in operation management?    

When the waste of overproduction regularly occurs, the consequences become the causes for other operational wastes. Wasteful Transportation occurs because excess raw materials, WIP, and finished goods take up valuable floor space. Wasteful Inventory builds cause additional costs in decreased inventory turns along with causing lead time to grow. Wasteful Motion from Operators because of having to move around excess inventory, causing early fatigue. Wasteful Wait times can happen because of waiting for authority in how to proceed with wasteful and excess Defects found several operations away from where the defects occurred but were buried in WIP containers.  

So why do more than 90% of organizations continue to overproduce?

We can list symptoms, as many lean articles do, like:

1.      Producing with large batch sizes to overcome long setup times and standard costs

2.      Suppliers are unreliable with their deliveries

3.      Planning for interruptions because of unreliable operations

4.      Producing towards estimations of what customers might want, weeks and even months ahead

Treating symptoms only provide temporary results. Ask again, why do organizations continue to overproduce?

A culture of firefighting will cause the symptoms of overproduction. Managers find it faster and easier to command and control decisions that immediately take care of symptoms. This results in short term resolution and overproduction becomes a regular solution for flow symptoms of the value stream . The alternative is to strive for a problem solving culture. But the beginnings of this type of initiative requires leadership starting the momentum

Why a culture of firefighting?

Managers are promoted from Line Worker to Supervisor without any development in Operations Management. Managers hired from the outside come to the organization with no development in Operations Management and the organization has no policies or processes to develop them once on board. Existing Managers have not been developed in Operations Management, unable to mentor new Managers.

The organization has not prepared for a transformation to continuous improvement. Many organizations have attempted to implement lean but mainly to resolve short term problems that may not be seen as value by their customers. Overproduction is a waste requiring longer term commitment and longer term success starts with being prepared.

Leadership engagement is thought of, by many of the leaders, as a role of direction and not as a role of engagement. They mostly value their time and must be selective of what they do with their time. The problem is the latter in that the selection is not to be personally engaged with coaching and mentoring. This lack of engagement faults perception, resulting in decisions with long lasting and unintended culture of firefighting within the system.

The root causes are then: Managers not being appropriately developed in Operations Management, the organization did not start with preparedness, and Leadership is not suitably engaged.

Resolving the waste of overproduction is a longer-term effort and each organization must understand the value of investment in improvement time to resolve the root causes.

The acceptance of overproduction is the acceptance of being like many of your competitors. Investing time in removing overproduction will move you ahead of your competitors and bring value to your customers.

Lean Teams USA 

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