The UNEX Blog

Overproduction: Are you measuring volume or value?

In an industry where so much emphasis is placed on boosting productivity, it might seem counterintuitive to name overproduction as the primary source of waste. Yet across most organizations, it consistently is. That’s because the volume of work produced does not necessarily correlate with the value of that work.

ford-car-overproduction

How can that be?

Think about it: manufacturing a product sooner than required – or in greater quantities than is needed – wastes time, labor, and materials. What’s more, having too much product on hand creates excess inventory, which increases the costs of inventory storage and management. If the product is seasonal, it’s now more likely to end up as scrap. If the product is perishable, it’s now probably headed for a landfill. That doesn’t put you ahead of the game, it puts you behind the eight ball.

Any time you make more product than you can sell, you are producing volume without creating value. In other words, you are being wasteful.

Even overfilling food packages – something producers often do to avoid throwing food away – actually creates waste. Food is packaged and labeled based on weight and volume: overfilling not only distributes unsold product, it misinforms consumers at the same time.

In any discussion of organizational waste, overproduction means more than outputting ill-timed or excess manufactured goods. Scheduling more meetings more often than needed, generating and distributing too much paperwork, creating reports with more detail than its recipients want or can absorb, keeping labor and equipment on standby, duplicating systems or running redundant processes, overpackaging (and the increased handling and transportation costs that result) are all unnecessary but common examples of wasteful overproduction.

The solution is to balance volume and value by carefully calibrating plans and processes so that production syncs with inventory needs. It’s not a matter of how much you output, it’s whether that output is available, accessible, and acceptable when and where it’s needed. That’s where the value will be measured. Because too much of even a good thing is too much. There’s nothing productive about that.

Download the Lean Manufacturing Guidebook Here

Lean manufacturing means creating more value for customers with fewer resources. At UNEX, we are firm believers in lean manufacturing (we use many of its principles in our own manufacturing process) and we design all our products and services to maximize customer value while minimizing waste. To learn how lean and UNEX can help you match volume and value, contact your Pickologist today.

 

Check out week three here: Waiting: Always a losing game