Hi, guys. Welcome to quick hits. Overproduction. I'm Catherine MacGyver. And today we're going to give you the ability to identify the waste of overproduction.
So you remember Acronym downtime? We're on the oh, overproduction.
So what is overproduction?
Overproduction is when we produce more than we need. So more than the next step in the process is ready to receive or whether or not we even need it as a whole. So a good example of overproduction producing more than we need is if you have a meeting scheduled and you have
10 participants, you print 12 copies of the hand out. Just in case somebody else comes over. Production can result will. Actually, overproduction does result in increased inventory and scrap rates. So when we talk about increased inventory, this is its own independent form of waste.
more stuff than we need, And then Scrabble rates relates back to our defects a little bit when we're talking about getting rid of stuff. So when we think about it from an over production standpoint, imagine that we're a pizza parlor and we just keep making pizzas independent
of when our customers order. We're going to end up at some point with a pile of pizza is behind us
that are going to end up being wasted or trashed. Um,
overproduction as a whole hits both the bottom lines from a raw materials costs. So when we make more than we need, we tie up those materials that could be invested somewhere else, and we're back to capacity costs. So we talked briefly about capacity. When we're talking about defects where
when we have a defect, we decrease our capacity because we have to do the same process
a second time to fix the mistake. When we're talking about capacity here in overproduction. Well, we're talking about is we're spending time not working on the most important things. So if we don't need this inventory, we could be investing that capacity somewhere else. That would drive value for the organization.
Um, overproduction can be caused by producing two forecasts rather than actuals. So this is one of the traps. When you hear about organizations they want to budget to forecast they want to produce the forecast. There's very sophisticated models around it. However, there is that possibility
that just because your forecast that you're going to need this.
You may not actually need this level. Um, the next reason is actually, in my mind, the most
important or the most significant of these reasons, it's a just in case mindset or just in case production. So rather than producing based off of what your actual demands are, so what, you know, your customers want you produce something to be ready. So using my example of the meeting handouts,
you have 10 people on the invite. Well, what if we add someone? I want tohave a handout for them so that just in case mindset,
another reason could be unclear customer requirements. So when we talk about unclear customer requirements, what we're talking about is does the customer want 10 or 12? And maybe we didn't ask. So we're gonna produce extra just to be sure that we get what they need.
The last one has to do with long set up time and poorly applied automation. So when we talk about this
long set up, time is when we're doing batch ing. So it takes us a while to get our instruments or equipment ready to go. So we're just gonna go ahead and run off 100 of them. That way, we don't have to re set up our instruments or equipment to get, you know, a run of 20 poorly applied Autumn Nation is we knew pert
automation that is not fundamentally driven by a human
and then has a set of sequences on it, and they're unchecked, so away to think about. This is if you could automate making those pizzas remember attack time. We want one an hour. If your pizza was made at the top of every hour,
regardless of when your customers needed or if there was a customer order,
you will at some point, end up in this trap of overproduction.
So managing overproduction has to do with just in time processes. So we talk a lot about just in time or this idea of pull. I am ready for the dough for the pizza.
Um, I am ready for that piece of information. So when the next step in the process is ready and available to receive
that, so we have this poll just in time processes these another way to think of just in time is think of them is on demand. So I don't make a pizza until you're ready to receive a pizza,
Um, and then developing workflow. So this relates back to this is another one of early in process principles that we want tohave flow in our processes.
It also relates a little bit back to work in progress. So instead of having that batch because we have a long set up time flow through the process with these huge chunks, we're gonna have one or two flow through. So at any point in time, any of the steps in the process are close to or can receive the next item of input
to continue the process.
Um, overproduction is simply making more than you need. It's important to call out. It's caused by a what if mindset. This is really challenging from a come from overcoming hurdles.
So you as the new yellow belt who's finished here and you can identify your waist, um, go out and you see Oh, we have this overproduction.
There is a very deeply emotional component. Thio what ifs in just in case. It's very related to see why a so In order to overcome overproduction, I've had to work with organizations about
to maybe have not enough. So you do invite that 11th person to that meeting, then they can get the handouts after the fact.
Overproduction is very, very closely related to the lane principle of flow. When the next step is ready or when the customer is ready, we're able to initiate the process then and thus have no need to create a certain plus throughout the process.
All right, guys. Thanks. Next step up is tthe e defect of or excuse me is the waste of waiting.