Difference between revisions of "Overproduction"
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Revision as of 15:11, 14 May 2014
Overproduction (oversupply) it's an excess of supply over demand in the market. It occurs any time a process makes more of a product or part than what the next customer in line needs. Overproduction is one of the most prevent types of waste, but it can be difficult to recognize. This makes it the pefect place to start identifying and eliminating waste.
Forms of overproduction
Overproduction can have two forms :
- Producing more than is required by customers (quantitative type of overproduction).
- Producing products faster than customers are buying them (early type of overproduction).
Reasons of overproduction
There are many different reasons for overproduction, some of which are linked to inventory issues. Not knowing exactly what the customer wants can be one of them. It leads to making more of each variety of product. Also a desire to utilize the remaining time on a shift ( beyond the known demand ) or to finish a raw of material can also result in overproduction. Sometimes overproduction is connected with poor quality. If yield is known to be 80 percent, extra goods are made so that 100 percent of customer orders can be completed ( assuming good product can e identified through inspection. ) Reducing the amount of overproduction has direct influence on expenses. Fewer raw materials are used, along with less machine time. If the extra goods typically are stored, reduction in overproduction production will be associated with reduced inventory and its corresponding financial impact.
Negative example of overproduction: If a problem in the production process produced a defect, overproducing the product would just produce more defective product which would require more rework it is important for Operations to produce only what is supposed to be produced when it is supposed to be produced.
Author: Joanna Panuś
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