(This is the eighth in a series of deeper dives into the 8 lean wastes.)
First a definition, then a story. Overproduction is similar to excess inventory in that there’s simply too much stuff. The difference between the two is that overproduction is the making of too much stuff, while excess inventory is the having of too much stuff. Overproduction directly causes excess inventory, but in special circumstances excess inventory can cause overproduction, as you will see in the following story.
I recently had the chance to tour an injection molding plant.* This plant had problems with making deadlines for shipping parts to customers. One look at their warehouse would show that it is filled to the brim and they’ve essentially run out of space, and they have been forced to start using off-site warehouse space for excess inventory. How can they miss deadlines if they have so much inventory?
(* – For those who are unaware, here is a short generalization/explanation of the injection molding process. An injection molding press features a two-piece mold that has a void where plastic is fed and shaped into the final part. Press closes mold together, plastic is injected into mold void, press opens mold, solid plastic part comes out. To make different parts, the press typically has to change out the mold, the type of plastic, or both. A changeover can be a complex process.)
As it turns out, their inventory data was way wrong. It was way wrong because the data collection process was not standardized. A contributing factor as to why the process wasn’t standardized because the fleet of injection molding presses was making more parts than were actually ordered and the warehouse managers had to try to fit everything into every nook and cranny, which made it very easy to lose track of where some products were stored.
All of this was started by a policy enacted by the new-to-the-company production manager. The presses are to make what is ordered by the customer – they order a certain quantity of a specific part, and the company puts that mold into the press and uses the right plastic and makes that certain quantity before doing a changeover to the next quantity of the next part.
Because changeovers can take a long time to complete and the changeover technicians might not be available right away to perform the changeover, the production manager has two choices: he/she can either let the press sit idle and make no parts or he/she can have the press continue to make MORE parts than what is ordered up until the changeover. The policy chosen by the production manager was the latter – keep the presses producing parts until the changeover can be completed.
So with our two main problems – missing deliveries and warehouse chaos – let’s do a couple five-whys analyses.
And the next one…
(There are actually a few other iterations we can do with the five-whys analyses but this is a good start. So many more causes of the problems can mapped out.)
So why is overprocessing bad? It can cause many other forms of wastes.
In the example above, the production manager could have used resources a little more wisely. Perhaps the operators could work on other more important projects instead of running extra products. Additional training with the changeover technicians to show them how to perform changeovers more quickly would mean there is less machine idle time (or time to produce extra parts). No more tying up of plastic in parts that aren’t needed right away.