Wastes in an Organisation: Overproduction
- Zeynep Yalcin Parks
- Jan 21, 2020
- 4 min read
I wrote about the eight most common wastes in an organisation in my previous blog post and explained the waste "Defects". This blog post is about the second waste of DOWNTIME: Overproduction.
Definition:
By dictionary definition overproduction is the action of producing more of something than is needed, or producing too much. Overproduction results from producing more (or faster) products or services than required. It is a particular concern because it tends to exacerbate the wastes of transportation, inventory excess and motion ( to be explained in future posts).
In some organisations production/ supply of services continues even when those who receive the output aren't ready for it or don't need it. That causes too much stuff, too early that the customer doesn’t necessarily want.
Overproduction is especially common in manufacturing, but it can occur in any workplace situation in which there is a bottleneck. Each piece of work that an employee works on can be considered as their “product” in business setting. In service industry examples of overproduction can be hiring too many people to do a certain task, unnecessary assessments or evaluations, unused data or reports, printing and filing documents before they are required, information sent automatically even when not required.
Possible Causes of Overproduction
Common causes of overproduction include but not limited to:
• Just-in-case (JIC) production instead of Just-in-time (JIT).
Just-in-case (JIC) is an inventory management method whereby materials, goods and even labour are on hand so they are there when needed in the production process. Traditional just-in-case strategy is still used by companies that have trouble forecasting demand. Just-in-time (JIT) inventory method, on the other hand, is whereby materials, goods and labour are scheduled to arrive or be replenished only exactly when needed in the production process.
• Unclear customer needs
• Producing to a forecast
• Long set-up times which also causes large batch sizes
• Late changes
• Poorly applied automation
• Unstable schedules
• Unreliable processes or distrust to the reliability of processes
• Distrust to own supplier to supply what we need when we need it
• Employees not knowing where to start and what work item have more priority than the others.
Possible Impacts of Overproduction:
Consequences of above causes include but not limited to:
Loss of time
Increased inventory cost
Increased labour cost
Increased facility cost
Additional complexity
Lower prices, possibly unsold goods
Demoralisation within employees
Possible Solutions:
Realize and accept that overproduction exists.
Identify the value flow using tools such a value stream mapping, process mapping, spagetti diagrams.
Value stream mapping is a representation of the flow of goods and information from supplier to customer through an organisation. It is a lean management technique that shows all important steps of work process necessary to deliver value from start to finish as well as delays, restraints and excessive inventory.
Enable maximised value flow by rearranging processes.
Use smaller, simpler, dedicated machines/steps rather than big machines/steps that have to handle every process.
Arrange equipment set up times to enable the production of smaller batches using the technique of SMED, Single Minute Exchange of Die.
The Single Minute Exchange of Die (SMED) is a Japanese process-based innovative methodology that involves the separation and conversion of internal setup operations (operations that can be carried out when the machine is shut down or off at time of working, an example would be the removal or exchange of a die or drill bit) into external ones (operations that can be carried out while the machine is in operation or running. An example in this is transportation of a new die or bit to the machine). The SMED makes it possible for organisations to reduce their lead times and to eliminate wastefulness during change over activities.
Use techniques such as Kanban to enable the "pull" strategy through your processes.
Kanban ("kan" means visual, "ban" means board) is a method and a visual system for managing work as it moves through a process. It helps to improve the delivery of products and services by eliminating bottlenecks and improving flow in a process. In simple terms, a Kanban board visualises the tasks that are to be done, in progress and completed and the workflow between them. Kanban is regaining in popularity and is being used in many different areas, from small agencies and start-ups to traditional organisations of all sizes. I'm going to write write more about kanban in a separate blog post.
Communicate the priorities of work to employees and support them when they don't know where to start.
Get employee feedback on how to reduce overproduction since employees have the best insight to their work.
The solution to overproduction is to establish a reasonable work flow that benefits your customer as well as your organisation. That requires well-established procedures in place for every process in your organisation, and if necessary, implementation of new processes to keep work from backing up behind particular bottlenecks.
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Zeynep Yalcin Parks is lead consultant at Derin Consulting. She helps organisations become better at achieving their purpose. She can help you find the wastes within your organisation and the right solutions to eliminate them .
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* Cover photo by Curology on Unsplash.
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