Overproduction – The Power Of Understanding Waste

By Terry Rayner

In a previous post Not Understanding Value Can Cost Printers More Than Customers, I discussed the meaning of Value as seen through the eyes of a Lean practitioner, now I want to address waste so that you can get out into your plant and start making real change.

Lean Identifies eight categories of waste that you will need to review and address if you are increase value within your business. As  increasing value will result in an increase in profits…

…and reducing waste = an increase in value!

The eight categories of wastes are:

1. Overproduction
2. Inventory
3. Transportation
4. Motion (operations)
5. Defects / Quality
6. Waiting
7. People Skills

To produce a printed product we go through many steps; for the example of overproduction let’s start in the office. The sales rep brings in a quote request for a 5,000 16-page, 8.5 x 11 saddle-stitched brochures, and the estimator builds an estimate based on the standards that have been entered into the estimating system.

These standards allow for spoilage at each level of production (To simplify this example I have made up the waste numbers/percentages listed):

1. Press make-ready waste:  100 sheets
2. Running waste:  3%
3. Post press cutting waste:  0.05%
4. Folder make-ready waste:  25 sheets
5. Folder running waste: 1%
6. Stitcher make-ready waste: 50 brochures
7. Stitcher running waste: 1%

For this example of overproduction I am going to assume that the purchasing agent rounded the paper order up to 5,500 press sheets and that is what issued to the pressroom.  Let’s also assume that the press make-ready was complete after 50 press sheets and the press running waste was only 2%.

In addition at each step of processing all of the press sheets received from the previous function are processed – The table now looks like this: 

While 173 extra brochures does not seem a lot of “overs,” however it is 3% of the order.

173 brochures that the customer is not paying for – Therefore, it has no value (100% waste)

Now let’s look at the impact of this overproduction:

If this happens on a regular basis there will be literally thousands of FREE over’s being produced each day, using resources that could have been used to produce product that would have been billable! Adding value!

When you next walk through your operations start looking at skids with extra boxes stacked upon them and asking yourself: “Is this overproduction waste?”

Don’t wait! Investigate and get your production team together; talk to them about overproduction and what their ideas are for reducing it.

Perhaps it will be apparent that your estimating standards need changing to allow less spoilage waste!

Perhaps you will need to examine your standard operating procedures and add new procedures that stop over-producing at each process stage if the allowed amount of spoilage has not been used!

I know what you are saying… we won’t be able to stop the pressmen or folder operators running these few extra sheets.  But you must.

“Look at it this way. Let’s assume that you control this and with the “found capacity” at each stage you are able to produce more “saleable product” each day. At the end of the month your cost of sales will have decreased, which in turn will increase your gross profit.”

In an industry where profit margins are slim, adding 1% to your gross margin that drops to your bottom line could equate to a 10% increase in your profits!

Click here to download an easy to use PowerPoint presentation (originally authored and posted by Harold Philbrick) to learn more about the eight-wastes and to use as a training tool for your teams!

Thanks to people like Harold who have shared their ideas and documented them, you can start implementing Lean without having to re-invent the wheel… download this presentation, read it, understand it,  and implement programs to eliminate all wastes in your business!

With over 25 years of print management experience Terry Rayner is a Lean Thinking Guru. Using his blend of customer focused philosophies and continuous improvement methodologies he has led companies through major changes to emerge re-energized. Certified in Lean Six Sigma Processes for manufacturing, office and sales environments he is relentless in his pursuit to eliminate wastes, which increase efficiencies and effectiveness; ultimately leading to higher customer satisfaction and significant profit growth.

Connect with Terry:  Getleanthinking.com / LinkedIn / Twitter