Bloomberg.com: Bloomberg Columnists: Doron Levin
Another good column by Doron Levin. “Overproduction” is considered to be one of the “8 Types of Waste”. It is also considered to be the “worst” type of waste by Toyota Production System practioners because overproduction (producing more than the market requires over a time frame) leads to all the other types of waste:
- Defects
- Overproduction
- Transportation
- Waiting
- Inventory
- Motion
- Unnecessary processing
- Not fully utilizing people's talent
Congrats to Doron for using the word “heijunka” (the concept of leveling production). It's overproduction to build large batches, because you might build a month's worth of product in three days, which leads to other types of waste. Or, if you're doing like GM, you're consistently building more cars than the market demands, which is leading to many forms of waste and pain.
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Interesting that he mentions creating “realistic forecasts of demand”…
The one thing we know about forecasting is it will never be accurate, so why not build to market demand instead guessing?
Even for a “build to order” company like Dell Computer, they still need forecasts for supplier planning, etc.