Comments on: Holy Overproduction, Batman!! http://www.leanblog.org/2009/01/holy-overproduction-batman/ Mark Graban's leanblog.org - Lean Healthcare, Lean Thinking, Lean Manufacturing, Toyota Production System Thu, 09 Feb 2012 22:59:58 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: andrewmc http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4454 andrewmc Thu, 29 Jan 2009 10:35:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4454 We are picking up a BMW 320i M Sport on Saturday, couple of points to note. The dealer we were in last Sunday did their entire January target on the 15th, at 79 cars, they did 27 cars last week. Unless you are buying a used, demonstrator or a basic model (you can have it in any color you want so long as its black) or a older model year, you're waiting for it to be delivered. Most models are still not from stock, so unless the spec you want is sitting at some port, the lead time is 4-6 weeks.<br/><br/>That said, you can get killer deals, one year old, >500 miles, reduced from £28k to £16k.<br/><br/>There have always been piles of cars like this up and down the UK, at ship yards, rail yards and in a variety of storage locations. This is not significantly different.<br/><br/>If you wanted to be able to see the difference you'd need to see how frequently they are turning over. We are picking up a BMW 320i M Sport on Saturday, couple of points to note. The dealer we were in last Sunday did their entire January target on the 15th, at 79 cars, they did 27 cars last week. Unless you are buying a used, demonstrator or a basic model (you can have it in any color you want so long as its black) or a older model year, you're waiting for it to be delivered. Most models are still not from stock, so unless the spec you want is sitting at some port, the lead time is 4-6 weeks.

That said, you can get killer deals, one year old, >500 miles, reduced from £28k to £16k.

There have always been piles of cars like this up and down the UK, at ship yards, rail yards and in a variety of storage locations. This is not significantly different.

If you wanted to be able to see the difference you'd need to see how frequently they are turning over.

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]]> By: Mark Graban http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4451 Mark Graban Wed, 28 Jan 2009 23:05:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4451 Thanks for the comments and the insight everyone.<br/><br/>I guess the interpretation depends, in some part, on whether "awaiting delivery to dealers" means they<br/><br/>1) have a buyer ready<br/><br/>or <br/><br/>2) they're waiting indefinitely to delivered somewhere, someday, TBD Thanks for the comments and the insight everyone.

I guess the interpretation depends, in some part, on whether “awaiting delivery to dealers” means they

1) have a buyer ready

or

2) they’re waiting indefinitely to delivered somewhere, someday, TBD

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]]> By: Anonymous http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4446 Anonymous Wed, 28 Jan 2009 13:41:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4446 Yes, there is overproduction, but be careful about judgment just by a picture. A single factory may produce 1,000 cars in a single day. Is this really a lot of cars? As Vladimir, there are some very normal operating conditions that makes it look like a lot but it isn't really. These pictures really are highly abnormal.<br/><br/>You have to understand it only by days on hand. Yes, it's growing. Yes, they have overproduced. Yes, they are trying to force dealers to take cars that they don't want. But these pictures tell you none of that. Yes, there is overproduction, but be careful about judgment just by a picture. A single factory may produce 1,000 cars in a single day. Is this really a lot of cars? As Vladimir, there are some very normal operating conditions that makes it look like a lot but it isn’t really. These pictures really are highly abnormal.

You have to understand it only by days on hand. Yes, it’s growing. Yes, they have overproduced. Yes, they are trying to force dealers to take cars that they don’t want. But these pictures tell you none of that.

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]]> By: Vladimir Dzalbo http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4445 Vladimir Dzalbo Wed, 28 Jan 2009 08:47:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4445 David, to my knowledge, the switch from trains to trucks is something that is already beginning to happen.<br/><br/>And that's exactly the reason why you have this huge amount at the storage lot: once you have delivered a batch from overseas, you have to slowly transfer them domestically. And if you do it in small amounts, you will inevitably have thousands of cars just waiting.. Unless you have a million of trucks waiting there for the ship. David, to my knowledge, the switch from trains to trucks is something that is already beginning to happen.

And that’s exactly the reason why you have this huge amount at the storage lot: once you have delivered a batch from overseas, you have to slowly transfer them domestically. And if you do it in small amounts, you will inevitably have thousands of cars just waiting.. Unless you have a million of trucks waiting there for the ship.

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]]> By: David http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4443 David Wed, 28 Jan 2009 00:44:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4443 Vladimir..."Cars are shipped in huge batches"...understand the need for batching for ocean transportation, but what about domestically? What is driving the need for a high level of batching--railroad policies, maybe? I notice when trains pass containing automobile cars, there are usually a lot of them, not just one or two. Vladimir…”Cars are shipped in huge batches”…understand the need for batching for ocean transportation, but what about domestically? What is driving the need for a high level of batching–railroad policies, maybe? I notice when trains pass containing automobile cars, there are usually a lot of them, not just one or two.

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]]> By: Vladimir Dzalbo http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4441 Vladimir Dzalbo Tue, 27 Jan 2009 22:01:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4441 Er..<br/><br/>I'll add slightly different comment here, I guess.<br/>I was involved in a project for one of such finished vehicles storages and should say that most of them have nearly the same amount of cars throughout the year.<br/><br/>What is interesting, it's not always caused by overproduction:<br/><br/>1) Cars are shipped in huge batches (yeah, you would say it's totally not Lean... but still it seems a bit difficult to get smaller transport units)<br/><br/>2) Many of these cars are in fact made to order and they already have their owners waiting for them.. <br/>It's unbelievable how huge the lead time to get the car you wish is and yet a vehicle can stay at the lot for a couple of weeks because of...<br/><br/>3) ... cars being delivered to owners or retailers in small amounts. See, you have a huge ship bringing vehicles from US and Japan to Europe. And then there is just a limited number of trucks which make final delivery.<br/>You might have 100K "made-to-order" units arriving but still you would need at least a month to get them all to the customers with all 100 trucks you posses.<br/><br/>Shortly - yes, there is huge overproduction in Automobile industry at the moment, we knew that before.<br/>Nevertheless based on my experience this picture could be taken as well one or two years ago. The whole supply chain actually does look very ugly.<br/><br/>P.S. And again, from my own experience, you cannot imagine how much it costs for Automotive Logistics companies to maintain these storage lots.. Just think about locating, tracking, moving items all over the place. Er..

I’ll add slightly different comment here, I guess.
I was involved in a project for one of such finished vehicles storages and should say that most of them have nearly the same amount of cars throughout the year.

What is interesting, it’s not always caused by overproduction:

1) Cars are shipped in huge batches (yeah, you would say it’s totally not Lean… but still it seems a bit difficult to get smaller transport units)

2) Many of these cars are in fact made to order and they already have their owners waiting for them..
It’s unbelievable how huge the lead time to get the car you wish is and yet a vehicle can stay at the lot for a couple of weeks because of…

3) … cars being delivered to owners or retailers in small amounts. See, you have a huge ship bringing vehicles from US and Japan to Europe. And then there is just a limited number of trucks which make final delivery.
You might have 100K “made-to-order” units arriving but still you would need at least a month to get them all to the customers with all 100 trucks you posses.

Shortly – yes, there is huge overproduction in Automobile industry at the moment, we knew that before.
Nevertheless based on my experience this picture could be taken as well one or two years ago. The whole supply chain actually does look very ugly.

P.S. And again, from my own experience, you cannot imagine how much it costs for Automotive Logistics companies to maintain these storage lots.. Just think about locating, tracking, moving items all over the place.

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]]> By: scottsorheim http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4438 scottsorheim Tue, 27 Jan 2009 14:57:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4438 Unbelievable! Unbelievable!

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]]> By: Mark Graban http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4437 Mark Graban Tue, 27 Jan 2009 14:22:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4437 Yes, Doug, they are obviously just looking out for the suppliers, not wanting to jerk around their component production schedule! Yes, Doug, they are obviously just looking out for the suppliers, not wanting to jerk around their component production schedule!

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]]> By: Doug Brickey http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4436 Doug Brickey Tue, 27 Jan 2009 14:20:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4436 Obviously, they are building inventory to maintain Heijunka!>:} Obviously, they are building inventory to maintain Heijunka!>:}

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]]> By: glanger http://www.leanblog.org/2009/01/holy-overproduction-batman/#comment-4435 glanger Tue, 27 Jan 2009 12:49:00 +0000 http://leanblog.bigbigdesign.net/2009/01/holy-overproduction-batman/#comment-4435 Amazing isn't it? Maybe they should hand out a bit of the bail-out money they got with each car. That would give us government subsidized vehicles :-) <br/><br/>In any case, on the flip side, it means that there will be some very good deals to be made if you are looking for a new car? Amazing isn’t it? Maybe they should hand out a bit of the bail-out money they got with each car. That would give us government subsidized vehicles :-)

In any case, on the flip side, it means that there will be some very good deals to be made if you are looking for a new car?

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