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over production

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  • #46879

    Mike Archer
    Participant

    Hello.  I am a DMAIC BB in training.  I am going to kick off a project on an area that is over producing.  Can over production be considered a variation reduction project?  I don’t really know how to define a defect and a metric so that I can run process capability and an MSA.
    Thanks,
    Mike

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    #155633

    Steven Bonacorsi
    Member

    Hello Mike,
    I think your referring to a couple different concepts in your question, and thats normal during your early days in training, so keep studying!
    First, overproduction is one of the 7 forms of waste, in fact, the Toyota guru called it the mother of all waste as it triggers all other forms, thus often a good project as it should contain lots o opportunites to learn the new tools and methods your learning
    Second, all processes contain variation and most customers prefer that variation to be as small as possible, but before you start thinking about the measure phase “process capability”, first spend your time working the Define phase activities of process mapping, VOC, charter refinement, etc…. learn how to take the customer wants and needs and convert into measureable metrics. For example: The customer says the want the widget or service delivered fast, you may want to be clear on where the start and stop trigges exist to ensure your both on the same page. Next, how fast is fast – is it 1 second or 10 years, can it be too fast? Once you know the customer requirements and each has been prioritized in the define phase, it will be much clearer t you on what you will need to measure for a process capability analysis later on.
    Lastly, make sure you conduct a measurement system analysis before you start collecting data – you will learn more about this in the measure phase training, but it will help ensure the error that is coming from your selected measuring system is acceptable for use. Last thing you need to do is cllect the wrong data the wrong way or with a tool that is inadequate.
    Hope that helps,
    Steven Bonacorsi

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    #155638

    Ron
    Member

    Hi Mike, I just wrote a blog about this very topic.  Your issue is very lean oriented in nature and forcing traditional Six Sigma tools may not be the best move in my opinion.  Hopefully your mentor will help you choose the right tools for the job.  If you want to read more of my thoughts please visit Lean Six Sigma Academy.  If you go to iSixSigma’s blog page you can find a link to my page on the left side of the page.  Read the post titled: “Is Six Sigma Dying.”  Good luck my man!  There is nothing more powerful than Lean and Six Sigma when applied properly. 

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    #155642

    somo
    Member

    I agree with the postings above. Hope this provides some insight. Like many of the production wastes, overproduction is a result of some process variation.  If the process variation is reduced, you will find that wastes such as waiting, inventory, and overproduction are minimized.  Although it isn’t a good idea to jump to solutions at this time, processes reduce the level of overproduction through leveling and smaller batch sizes.  But again, these are solutions and you will need to understand the sources for the variation in the process before you will be successful in the implementation.  Have you measured the demand (average and variation) by product type or group? 
    Another root cause for overproduction are long and variable machine setup times.  Have you measured your setup times (average and variation)?

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    #155647

    Yadav
    Participant

    Mike,
    You will find the answers provided in the previous messages helpful. I would like to add to that.
    Your 1st Question: Can over-production be considered a variation related project?
    My Answer: Depends on a few factors. Yes, under the following situation: -> If there is a lot of rework happening in your internal process, that means you are doing overproduction because of ‘not conforming to reqd. quality norms’. Your metric in this case will be rework % or defect %.
    You can use lean tools like VSM more effectively under the following situation:-> If you are producing products with different features and there is problem of scheduling / logistics, use of lean tools will be more appropriate as compared to DMAIC methodology. Your metric in this case will be inventory cost or in-process inventory. It might happen that you are keeping in-process inventory to care of in-process rejections. In such cases, use DMAIC methdology. If your excess inventory is due to resource allocation and scheduling, use lean tools.
    So you need to first do some basic analysis as mentioned above and prepare proper background so that you first convince yourself of the proper usage of tools.
    Your 2nd questions is what should be the metric?
    Some part of that is already expplained above. You have to check the rework level and defect rate and take that as a metric if you are using DMAIC methodology. It will be worthwhile to look at the cycle time as well. It might happen that there is a lot of variation in the cycle time due to rotation between work force or m/c inefficiencies and make sure that you look at the OEE (Over equipment effectiveness), to ensure that proper metric is identified.
    Hope this helps.All the best.
    Ajit

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    #155650

    Mike Archer
    Participant

    Thanks to everyone for all of the replies.  I found every one of them to be very helpful.
    There have been 2 GB projects closed on this very issue (both of them claim victory).  The last thing they need is a failed BB project to damage the credibility of our SS organization.  So I want to make sure that it is done exactly correctly from the very first step.
    I have 2 more questions:  Has anyone seen a Lean roadmap that has phases, tools, and deliverables?  Also, I suspect that scheduling and consumption logistics will turn out to be the main cause of the overproduction (not so much variation in the build process).  If that is the case, what is typically the metric and defect?  Lead time, inventory level, something like that?
    Thanks again to everyone,
    Mike

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    #155655

    CT
    Participant

    I agree with AJIT to a point, and although very correct, you must start with some lean first. Address the issues that are right in front of you. Take the quick hits out of the equation. This will help drive your “Y” of the project and give you a clear direction for which to conduct your DMAIC project. You must have the basic Lean tools in place or finding the process variation will be very difficult at best, when so may exist in a non-lean environment.
    just my opinion
    CT

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    #155657

    GDS
    Participant

    Rath & Strong sales a nice Lean Sigma Roadmap, one side has the process phases and the other side is tools for each phase, you can order from their website.
     
     

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    #155697

    Yadav
    Participant

    Mike
    For information related to lean tools and methodlogies, you may visit the following website: http://www.lean.org.
    I am afraid that with the limited amount of information provided and the lack of exposure to what is actually ‘happening’ in your process, this forum can probably provide you pointers, which can help  you to ‘get there’.
    Assuming that you already have some basic process measures, just glance through them and check out which one is worth focusing from process owner point of view. What is current pain for the process owner – high defect rate or excess inventory or unbalanced work load or high equipment down time or high rework or ……Try to understand the where the three key resources stand in terms of their utilization and performance – Man, machine and material. You will get the clue yourself, as to what to focus on and how the issues are interlinked.
    Use lean tools like ‘kanban’ to stream line your material flow and then use DMAIC to improve the process. Check the OEE for your dept. and monitor the trend of MTBF for all key equipments. Just my advice.
    Ajit 

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    #155708

    Wayne Marhelski
    Member

    No offense, but why would overproduction in an area require a BB project? Just stop overproducing.
    Okay, so that may be an oversimplification, but this shouldn’t be complicated unless of course it comes down to the accounting and finance department. In this instance, it may not matter what you want or think as the production of units allows for the absorption of overhead costs. Depending on your controller or CFO, you may not get any traction with that discussion, so I would suggest you start there.
    The other variable may be that situation is very much equipment controlled. By this, I mean that the machinery which was purchased 20 years ago has many units and/or material in some form or another throughout the machine. Think of a printing process where the paper travels through the machine. Stop the machine when you reach your order quantity and you still end up with product in the machine that is no longer required.

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    #156334

    Alastair Lea
    Participant

    If you already know the solution, i.e. stop the over production, you do not need to go through a DMAIC project.
    However, if you wish to chart it, this is simple.
    Record daily production figures.Plot on a run chart e.g. I-MR.After some time you will get upper and lower control limits.You can compare these with customer specification i.e. the target production volumes to generate Cp.

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    #156338

    S Cubed
    Member

    Or you could come work with me where we are 10-30% overproducing and selling every bit of it.  My goal is to overproduce due to high demand.  I would rather have your problems.

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    #156346

    Wayne Marhelski
    Member

    If you are overproducing by that much and still able to sell it, then apparently the market demand isn’t understood very well. Does your company build-to-order or is it building to a forecast? What happens when the market dries up and your left with more inventory than you can sell?
     
    Wayne

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    #156358

    S Cubed
    Member

    Forecast.

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    #156365

    BritW
    Participant

    If you are selling everything you are making, then how are you overproducing?  In terms of the lean discussion, overproduction isnlt producing higher than theoretical capacity, it is producing more than you can use/sell (i.e., waste).  Might want to examine yoru forecasting methods to see how often they are off.

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    #156367

    gt
    Participant

    overproduction means you produce more than what you need! Obviously sales are doing a great job of selling what has not been planned. Now, what is the impact on other products lead time? i don’t know but it certainly create some noise in a production environnement which is something we would look at first in order to fill out demand in a timely fashion. good luck 

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    #156369

    Wayne Marhelski
    Member

    I would take a step back and review the S&OP (Sales & Operation Planning) process, if you have one. If sounds like some critical information is being missed.
    Two scenarios here (and it is just a matter of time):
    1) Demand spikes higher and goes beyond your capacity and tick off alot of customers.
    2) Demand takes a nose-dive and your stuck with alot of inventory.
    I would go back and do a sanity check on the error factor in the forecasting method. Historically, look at the forecast versus sales for similar periods of time (monthly, quarterly, and/or annually) and determine the accuracy. The goal is to get smarter with the forecast and decrease the error rate. For big variances, see if there any specific factors: discounts, advertisements, etc.
    Wayne

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    #156422

    GrayR
    Participant

    The issue is that there is some confusion over what really is ‘overproduction’ in the TPS sense. TPS is based on the establishment of process standards with two objectives: the first to ensure that process always meets the standard, and second to work to improve adherence to the standard so that eventually the standard can be raised. (There are some very good references that show the significance of Plan-Do-Check-Act (PDCA) to TPS (Liker, Dennis, Spear . . ), but most ‘lean’ companies don’t understand the discipline required to make it work.)
    TPS is heavily focused on interlinked PDCA cycles which are tested by the minute, hour, day, etc.  In this case, the standard involves the establishment of a ‘production’ standard (includes both a quantity and a time to produce — time related to takt time).  The objective is to work to meet the standard 100% of the time.  (The goal of the problem-solving process (linked to andon) is identify when the standard isn’t met and implement countermeasures.)
    The standard can be missed in two ways — underproduction and overproduction.  Most companies understand the causes associated with underproduction (quality problems, low productivity, maintenance issues) and issues (poor delivery, overtime, etc.), but they don’t recognize the problems associated with overproduction.  Overproduction is a manufacturing (supply) problem.  The reason is that a standard has been established and the manufacturing process lacks ability and discipline to work to a standard. 
    If the standard is too low (e.g., you can sell everything that is being produced) — this is a different problem with different causes.  There are some other considerations, but basically a low standard in relation to demand is not a manufacturing problem.

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