Overproduction is a comfort Waste. When we want to be well prepared for pending orders, it happens.
Just in Time:
There are 2 ways of dealing with customer demand: “the push” and “the pull”. When we push fabrication of components, it’s usually in anticipation of orders that haven’t arrived yet. We’re the active agent, and push out inventory to pile up at the other end, waiting to be scooped up.
We’re comfortable with pushing. It’s a great feeling to tell a pending customer that “we’re ready to start now” and “have materials standing by,” but what happens when things change?
Pull production, also called “Just-in-Time” (JIT), is living close to the rocks. It requires a fine-tuned logistics and production system because we’re not making components ahead of time. They’re made when the orders come in.
When formal customer demand pulls production across the assembly line and onto the construction site, we stay nimble, cash-rich, and Lean.
The Pitfalls:
If it were easy, or felt natural, to fight the Deadly Wastes, we wouldn’t be talking about them. They plague us because fighting them is hard and usually outside our comfort zone.
It’s instinctual to prepare. When the shelves are bare and we’re waiting for the phone to ring, we want to gather our nuts together because our instinct tell us that will save time. But here’s what happens:
- Design Changes: Many construction components are highly specific to the job, and trends shift quickly. If you overproduce your most popular model, the next customers may want design alterations, making those components obsolete.
- Storage: Once you produce it, you have to store it. It’s up to you whether to pay for indoor storage or watch the materials deteriorate in the elements.
- Cash: Overproduction is Inventory Waste’s more dangerous cousin. It freezes all the cash you use to produce, leaving you unable to use it until an order thaws it out. Until that happens, you lose the opportunities that being nimble with cash provides.
Estimating Jobs:
It’s your job to know, within a certain percentage, how many materials you need for a job. Your first deliveries are often from a larger supplier that you have a good relationship with, so naturally you’ll want to get as much from them as possible.
Material Waste, shrinkage, theft and other unknowns are the wild card. You can either order more than you probably need initially, or only what you know you’ll need, expecting to have to make a few trips to the local supplier.
Stay uncomfortable. Ending a job with surplus material means extra handling, extra transportation, and/or extra storage if you can’t use it right away.
Keep Inventory:
Reducing Waste often involves tasks that feel wasteful in themselves. Take the time to document the materials delivered to your site. It doesn’t take as long as you think; consolidate the bills into one running spreadsheet.
Empower your crew foremen to keep track of what they use, marking it on the spreadsheet periodically. (This will also have the added spin-off of making them aware of the efficiency of their own consumption.) With this tracker, you’ll have a better idea of what materials you’re actually using, so you’re less likely to swing blind next time. It will also inform you of what should be left over (if anything), and you’ll be able to see at a glance what you can move to another site to avoid purchasing there.
