Editor’s Note: This is the fifth article in a year-long series about how seven common types of waste in manufacturing can create unprofitable activity and how to address them in your plant.
Minimizing wastes associated with overproduction and overprocessing at your precast plant can lead to leaner, more efficient operations.
By Claude Goguen, P.E., LEED AP
Henry Ford once said, “If it doesn’t add value, it’s waste.” In order to assess waste, it is useful to examine the process from the perspective of the customer. Within the production process, does each action constitute a value for the customer? If not, this action holds no value and could be considered a waste. With this in mind, manufacturers can identify wastes in their operations given the time to observe the process from customer order to delivery. These wastes generally fall into seven categories that are explored in this series, and the two profiled in this article are overproduction and overprocessing.
Let’s say you order a load of Portland cement. As a precaster, your primary focus is that you receive the shipment quickly and that the cement meets or exceeds your quality expectations. If the supplier addresses these concerns, you’re a happy customer.
The cement supplier has many tons of cement in their inventory, and they’ve been adding a material to the clinker that lightens the color of the finished product. As the customer, suppliers’ large stock of diverse types of cement you do not require doesn’t matter to you. Also, since you manufacture underground products, the lighter concrete color doesn’t add value to your particular application for the cement you order. Your main focus is getting an on-time load that meets your applicable specifications – everything else can be considered wastes. In this example, and as their customer, their having an abundance of cement in stock is overproduction, while their adding a process and material to lighten the concrete color (an attribute you don’t need) is overprocessing.
Overproduction and overprocessing are two of the seven wastes of lean manufacturing.
Precast concrete manufacturers also run the risk of overproducing and overprocessing, which can lead to excessive waste. Learning how to diminish or even avoid these wastes can result in a leaner process and a variety of associated benefits.
Because overproduction can impact most of the other wastes (transportation, inventory, motion, waiting, overprocessing and defects), many say it is the most impactful waste of all. An increasing amount of product manufactured in excess of what the company needs produces more product the company must inventory and periodically handle. Additional handling increases the chance of damage that may require repair or replacement, as well as the potential for quality issues.
Overproduction can manifest in multiple ways, including manufacturing more final products than current demand (septic tanks, manholes in the yard) or overstocking more components than needed during manufacturing (cages, blockouts).
In the 1950s, Eiji Toyoda, president of Toyota Motor Manufacturing, was invited to tour the Ford assembly plants in Michigan to study their processes. Toyoda had been invited a few times to learn from this revolutionary method of manufacturing.
When Toyoda toured Ford plants, he noticed excessive levels of product in inventory. He found that Ford rewarded managers who produced lots of parts, keeping machines and workers busy despite this resulting overproduction and disruptions in flow. He also observed that Ford held many finished model T’s in inventory.
When he returned to Japan, he tasked an industrial engineer named Taiichi Ohno with improving Toyota’s manufacturing process so they could compete with Ford. Toyota did not have Ford’s vast manufacturing and inventory space or access to the same amount of materials. Instead, it developed a process to create a one-piece material flow that could be efficient and flexible based on customer demand known as the Toyota Production System (TPS). TPS incorporated the concept of the “pull” system. This means a product or component is made based on demand or “made-to-order.” Making products or components in anticipation of a speculated future need or “made-to-stock” is a “push” system and leads to many types of waste.
For example, a precaster may manufacture welded wire cages of varying diameters in anticipation of them being needed for manhole pours. The steel assembly workers may be proud of their output, but the increased number of cages exceeds demand and ends up occupying space in the plant or yard. If steel is stored outside for too long, it can lead to quality issues, such as the steel becoming dirty or damaged. The precaster can also run into transport wastes as it moves cages around until they are needed.
This is an example of a “push” system of manufacturing, where the manufacturer makes-to-stock in anticipation of a future need. Ideally, manufacturers should operate in a “pull” system. Here, the cage would only be made after a customer request. The goal is not to necessarily operate in a pull-only system, but to find the optimum balance of push-pull that will enable a good production flow without overproducing components.
What precasters need to do is identify a stock level that triggers when more cages need to be produced. Think of it like the low fuel light in your car. When the light comes on, you’re low on fuel but have enough to get to the gas station. Continuously filling up your car while the needle hovers near full would be wasteful.
Preventing pileups of inventory along the production process is the goal of Kanban, a scheduling system developed by Taiichi Ohno for lean manufacturing and just-in-time manufacturing. The Kanban system limits the buildup of excess inventory at any point in production. The manufacturer establishes limits on the number of items waiting at supply points and reduces inefficiencies as they are identified and removed. Whenever limits are exceeded, inefficiency should be addressed.
“We have begun using a Kanban method to place the order for the reinforcing shop to produce reinforcing cages for the form setup group,” said Alan Pritchard, plant manager at Smith-Midland Corporation. “This made a difference when we had instability within the shops related to COVID-19 concerns and to prepare for possible unpredictable attendance related to health concerns.”
The pull system also applies to final products. Many precasters manufacture a high number of stock products during slower winter months. The goal is to keep machines busy and employees working, so managers speculate what customers will need when the construction season ramps up. The potential downside is that there is money tied up in that stocked product, along with storage costs.1
Precasters may perceive making products to order as a delayed method of delivering them, as opposed to pulling something from stock; however, that delay is exactly what should be examined to streamline the production process. How can the company make products faster without sacrificing quality and safety? Once that’s figured out, the need to stock so much product becomes less important.
Overprocessing occurs when additional work does not add value for your customer. It includes taking unnecessary steps in the process due to factors such as poor design, poor quality manufacturing or faulty tools and machinery. Overprocessing also includes adding attributes to a product that are not necessary. All of this can incur costs that add up over time.
For example, if a precaster produces an underground structure that requires a coating under the waterline, but applies this coating throughout the inside of the structure, this is overprocessing. The coating above the waterline does not add any value for the customer. Another example is filling in minor bug holes after the product is stripped. This process requires time and money, again adding no value to the customer as they already have an expectation of the final product. The company is incurring waste by adding a step to meet an expectation that may not exist. In this case, the first thing should be to evaluate whether the bug holes are excessive. Many concrete products contain bug holes, which are not detrimental to the function and durability of that product. If they are deemed excessive, performing a root-cause analysis to determine the cause and addressing it could eliminate that added step, thus cutting down on waste.
Overprocessing can also be attributed to internal processes of manufacturing. For example, if storing and moving stock cages results in having to clean the reinforcing and readjust the ties, an additional step is created. This step adds no value to the internal customer waiting for the cage in the next step of manufacturing.
Finding the optimum balance
Increasing efficiency in precast operations requires focusing on one aspect at a time. Examining the flow from customer order to delivery can help identify actions that bring value and actions that constitute waste. In terms of limiting overproduction, looking at past sales trends, keeping up with industry outlooks and enhancing communications with customers can help develop a leaner, more accurate inventory. Additionally, developing internal safety stock levels within the manufacturing process can avoid overproduction of product components. Continuous training and standardization can help lower overprocessing while still allowing you to deliver the quality product your customers expect. PI
Claude Goguen, P.E., LEED AP, is NPCA’s director of technical education and outreach.