Overproduction: Why Making More Than Needed Costs You Twice

What is overproduction in manufacturing?

Overproduction means making more than the next step or the customer needs, or making it earlier than needed. It is called the worst waste because extra parts create inventory, handling, searching and hidden defects. A busy machine making unwanted parts looks like productivity, but it is not.

In many plants the machine is never allowed to stand. The supervisor is proud when it runs all day. But a machine that runs without a need is not earning. It is spending material, power and labour on something that will sit in a corner.

What are the three kinds of overproduction?

1. More than needed. The order is for 200, and the plant makes 230 "just in case".
2. Earlier than needed. Next month's jobs are run this month because the machine is free.
3. Faster than needed. A machine makes parts quicker than the next step can take them, and a pile builds up in front of the next machine.

All three look like efficiency. All three tie up money.

Where do we see it?

In the shop

• Cutting all the bars for the month in one go.
• Building finished goods for a forecast that is not yet firm.
• Running a big batch because the setup is long.

In the office

• Printing 500 copies of a form that changes every few months.
• Making a daily report that nobody opens.
• Buying a full truckload for the discount when only half is needed.

What does it cost? An example

An order is for 200 pieces. The supervisor makes 230, "for rejection safety". Only 5 are rejected. So 25 good pieces go into the store.

Six months later the customer revises the drawing. The 25 pieces no longer fit. They are scrapped.

(These numbers are only an example.)

If the real worry was rejection, the answer was to find why parts get rejected. Adding 15% extra every time only hides the cause.

Extra parts are not safety. They are money sitting in a corner, waiting to go out of date.

Why does it happen?

• Long setups. If a setup takes two hours, the plant runs a big batch to make it worth the effort.
• Fear of rejection. Extra quantity is easier than fixing the cause.
• Distrust. We do not trust a supplier or our own machine, so we build a cushion.
• "The machine must not stand". Keeping the machine busy is mistaken for good performance.
• Planning to a guess. The plan follows a forecast, not what the customer has actually asked for.

How does overproduction feed the other wastes?

Extra parts need space (inventory). They must be moved (transportation) and searched for (motion). They make the next step wait behind the pile (waiting). And a big batch can hide a defect until all the parts are made (defects). So one decision to "make a few more" can start five wastes.

How do we reduce it?

1. Make what is called off. Agree with the customer which part of the schedule is firm, and make only that. This is a pull approach: the next step asks, the previous step makes.
2. Fix the cause of rejection instead of adding extra quantity.
3. Cut the setup time so small batches make sense.
4. Agree extras in advance. If an extra is needed, write a small fixed number on the work order.
5. Plan by need. The daily plan should follow what is needed, not what keeps machines busy.
6. Change the habit. Tell supervisors that a stopped machine, with no demand, is a correct decision.

How to start in your plant

1. Take five recent work orders. Compare the quantity ordered, the quantity made and the quantity dispatched.
2. Note every case where more was made, and ask why.
3. Look at your store for items that no order is asking for.
4. Agree one clear practice: the work order shows the exact quantity, and extras need a written reason.

Play the video: Overproduction vs Just in Time: Busy but Zero Value