Overproduction & Inventory | Flow vs Friction Ch.2 Why Productivity is Ruining Your Life

Speaker A: Welcome to leanverse, where lean thinking meets modern life. I'm, um, your host, Bernadette Hill and I'm joined by my co host, Tatiana Sell. We're two lean Six Sigma black belts who spent our careers helping people and organizations simplify, improve and thrive. Our goal at leanverse is to ignite the desire for transformation and provide the tools to turn intention into action.

Speaker B: Hi, welcome to leanverse, the new podcast where we explore lean thinking in modern life. My name is Bernadette Hill and I'm

Speaker A: a Lean Six Sigma black belt and a continuous improvement professional.

Speaker C: Hi everyone. I'm Tatiana Sao, co host of the Lean Verse with Bernadette Hill. I'm a business operations and continuous improvement

Speaker B: leader and together we geek out about all things Lean.

Speaker C: Geek out on Lean Six Sigma methodology.

Speaker B: I am joined by my co host, Tatiana Sell.

Speaker C: Let's dig in.

Speaker A: It's easy to see waste when something is broken. It's much harder to see waste when everything looks productive. In our last episode, Tatiana, uh, and I explored how defects and over processing quietly reinforce each other. Today we're shifting to a different pattern, one that often feels responsible in the moment. Overproduction and inventory. These are the wastes that show up when we try to get ahead, when we produce, just in case, when we stockpile, buffer or build early to feel prepared. But what happens when producing more actually creates friction? In this episode of Flow vs Friction, we'll explore how overproduction leads directly to inventory and how inventory story hides problems instead of solving them.

Speaker B: Nice to see you again.

Speaker C: Nice to see you too, Bernadette. Uh, well, welcome back.

Speaker B: We are, uh, going along with our month of Lean Verse, our flow and friction series for February. And we're using eight waists of lean as the lens for the series. If you remember, in the last episode we were looking at defects and over processing and one pattern that showed up was how people often react to problems by doing more. And if you haven't listened to episode five, we highly recommend you do exactly.

Speaker C: So today we are shifting to another, uh, pair that creates friction in a very different way. Uh, overproduction and inventory. We're starting with a life story that almost everyone has experienced not at work, not in a factory, but at home. So it's one of those situations where doing more really feels like efficient in the moment, but quietly creates cluster ways and frustration later. If in this series it's about improving flow, I want to say that this episode, it is really about learning when not to produce. I said not to produce. Folks, you will get the pun I promise. Well, let's get into it.

Speaker B: This uh, this story actually may sound pretty familiar to people. Like many parents, my husband and I prefer that our family eat home cooked meals together. Right. I think many folks can relate to, you know, wanting to eat less takeout. It saves money, it helps us eat healthier. And honestly, gathering family to eat at home together is one of the best ways that I know that we can connect. But as busy professionals and parents, my husband and I often have limited, uh, time to cook. So with that in mind, I was trying to solve this problem and I made what I felt like was a smart decision. I went and got a Costco card and I started buying groceries in bulk so that I could reduce the grocery store trips, stock up on, um, food so that we can cook in batches. I thought maybe if I cooked in batches and packed the food and stored it, it would be much easier on our business schedule. And so I was trying to be prepared. I was trying to reduce decision fatigue during the week and avoid those small, frequent trip to the grocery store. I also thought I was saving money. But what I realized pretty quickly was that I had way more food than we were actually consuming. We are a family of four and two of those, uh, individuals are children. And here's the funny thing about kids. Their appetites are pretty inconsistent and their eating habits are pretty variable. There's that word variation again, right? One day they may love something and the next day they hate it. At the end of, uh, the month, I had collected multiple family sized packages of the same snacks just sitting there. And so you can also remember that we're busy professionals. If I couldn't find time to cook one meal, was I going to reliably find time to batch produce meals? Probably not. The result was pretty predictable. Our bread went stale, fresh produce rotted, I had to throw things away. And then my family started asking for more variety. When you're buying it in bulk, you don't have the option to buy smaller packages of different things. You're buying big packages of the same things. And suddenly they wanted variety again. And we were back at uh, the grocery. I was back at the grocery store much more frequently. And before you knew it, we were eating takeout again.

Speaker C: Oh my God, I totally feel the pain. I've ah, been there, the Costco vortex, the you know, desire to have the variety, but you're buying big packages of Spanish and everything. I totally relate with you. Well, overbuying is really, uh, the example here of uh, the equivalent, right, to overproduction and all that food sitting there already paid for, waiting to be eaten. That's inventory. Do you agree?

Speaker B: Agree. You know, anybody who's ever had six boxes of halfway eaten cereal that got stale in their cupboard knows this concept. Right. Um, if we are, we are. What I was doing was trying to buy for an intention and not buy for what was actually happening in the, you know, our condition. Right. And so the impact for that wasn't just food waste. It showed up as lost cash flow. Because now we had money tied up in inventory of food just sitting there that nobody was actually eating, that I wasn't cooking. Right. Even though our intention was good money, I could have used to do buy something else. Like maybe saving up for that vacation we had planned in our last series. Right. In our New Year's resolution series, um, that activity that would have supported our North Star of family harmony. We weren't eating at home as much as I thought we should.

Speaker C: Oh, okay. Well, I need to confess. I do have an inventory of beans because that's one of my favorite things, but beans. Exactly. That's my inventory of beans. Nobody want to open my pantry. Right. It's a little bit scary, but hey, uh, okay, back to you.

Speaker B: I made a simple but powerful shift. I stopped buying based on what the ideal week should look like, and I started buying based on what was actually really going on at home. That meant that that might, that smaller grocery trips were really the right thing for us to do and that it was the answer in this case rather than the problem that I was trying to solve. I learned that our, you know, I also learned that our town hosts a weekly, um, farmer's market. So if I wanted fresh items that I could use for that week that was in season, that was something if I was going to make the effort, instead of going to the grocery store, I could go to the farmer's market. There I could buy higher quality, less processed, hahaha, you know, the process, less processed, um, produce and goods. And then I could buy them in smaller quantities than the ones that were, you know, at Costco. Of course they were in season and that meant that I was going to use them in the week that I bought them. You know, without naming it at the time, uh, we were moving closer to just in time processing supported by a better personal kanban. Now our kanban board that I showed earlier in earlier episodes could have our groceries on, our grocery trips on, and exactly what we needed. I used what we already had first. Closer to a first in, first out mindset. Right? So like that Milk that's going to expire first, you want to use that first. And instead of big corrective swings, I made smaller, more frequent adjustments. So instead of um, waiting till I had a whole list to go to the store if I needed a couple things and those couple things made the next three days worth of meals, I went to go get those couple things. And once I made those adjustments, that overproduction stopped and that inventory shrank naturally. So all, so the waste of overproduction and inventory dropped as well. We started meeting our monthly meals budget because I wasn't uh, buying so much, um, locking up the cash and then just throwing that away at the end of the month. And then the meals became easier to sustain, not harder because if I was missing one ingredient, I could just run and get it to fulfill a meal rather than having to wait for a bulk trip. So, um, and buying in a lot of extra things I didn't, we didn't need.

Speaker C: Oh, that's a very smart, I love the just in time concept situation. And just this morning I was talking with my husband about the first in, first out. Because we just got this meal delivery system that we're kind of subscribed, uh, to and they deliver to us, uh, those beautiful, you know, kind of a plastic containers with juice inside of it. They have all the colors. So we kind of put all of them in order just to make sure that the new ones are kind of in front so we can see, we can visualize. So I love a first in, first out mindset and just in time as well. So very relatable story. I appreciate you sharing that with us. But let's go a little bit towards the conversation on definitions. Right. We talked a lot about two types of ways here. Let's start with overproduction. The classical definition of it, it is producing more earlier or faster than what it's needed by the next step or by the customer.

Speaker B: Right. And looking back at our story, the groceries, um, buying those in large quantities earlier than we were going to use them and more than we actually needed was what caused the additional, the extra inventory. Right. As we talked about earlier, waste begets waste. And that's how, how we ended up with more inventory than we could use.

Speaker A: Mhm.

Speaker C: Yeah, very interesting. Well, you said the word. Let's now define inventory. So inventory, it is the excess or unusable stock of materials products, information beyond what it's needed to meet the immediate demand. Um, in this case, we talked a lot about the demand of food. Can you, can you link to the grocery store Situation one more time, the story.

Speaker B: Oh, sure. For us, the inventory showed up as food already paid for, sitting in the fridge and pantry waiting to be used. Some of that food got stale and expired before even we even could eat it or make a meal with it. So we were throwing food away weekly. Um, now after we made that change, I maybe throw something away once per month, um, once every two months. It's much, much rare. And when, because we're using first in, first out, that also helps me choose what I'm going to cook. So it helps me with the decision fatigue as well. So I'm not looking at all of our inventory, trying to make a decision every day about what am I going to cook. It's what's going to go bad sooner. Okay, maybe that gives me the idea of what meal to make next.

Speaker C: That's awesome. It's efficient, it's fresh. The whole thing is just great, right?

Speaker B: You know, I think a lot of folks, like we mentioned, a lot of folks probably have this, um, situation. I've tried the meal services as well, like you have. I love getting just enough for the meal that you have at hand, uh, with no food waste afterwards and also getting it delivered. You don't have to go out to go get the groceries. It's a really, uh. And we have actually looked at the cost. You know, it's about equal. Sometimes it saves you money to do it this way. So I think you're going to find really great examples. We've tried everything. Right now we're on the, you know, cook as we go, get things as we need. But we might try meal service again in the future. But the broader pattern, um, this example uncovers really is that overproduction, it creates inventory. I think we said that many times and showed that. Right? Because anything you produce before it's actually needed has nowhere to go except for to sit in, in storage. Right. And the more inventory that we carry, the harder it becomes to actually see what's truly needed. If I've got a bunch of expired, half drank, um, milk cartons in the refrigerator, it's hard for me to see do I need to go get a fresh milk because I don't know that I need it. So I think you can see that the more inventory you carry, the less you're, the less easy it is to see what you really need.

Speaker C: So let's talk about why overproduction by its own matters. So overproduction you mentioned ties up cash. When we produce more than what it's needed, that money, it's Spent before the value is realized. In a business context, that's very important to think about it. It's also creating the risk of obsolescence. So think about this. Information becomes outdated, designs change, food spoils. That's the whole problem. What was once useful, right. In this case, uh, ended up kind of a losing value because value was created too early. It also distorts Bernadette, how we understand the demand. So it's another point should be talking about because when the output is pushed instead of pulled, the forecast ended up becoming way less reliable. We ended up planning based on what we already produced, which might be wrong because we're overproducing instead of producing and planning really what it's actually needed next.

Speaker B: I love that you just said that because it's giving. When we, uh, when we're buying things early, we're sending the wrong signal to the, the procurement team, the purchasers. Right. Um, that say we need stuff, we need this on this cadence, in this quantity. So they buy that, uh, and the signal instead should be pull. What are we, you. I know we'll get to that at some future state, but what is the customer using? And then are we going to, you know, restock it? Right. And so you mentioned it in a business, uh, context. Let's look at inventory. In a business context. Inventory carries very real costs beyond just storing it, moving around it, causing a safety issue. All of that, there's handling, tracking, dollars tied up in items that aren't delivering value. In my, uh, workplace, uh, examples I used to work in procurement, and you can, if you buy obsolete components, uh, the, uh, vendor is not going to take them back. You're stuck with them. So you, you don't want to buy early because it's just going to sit there. And if something goes obsolete, then you're stuck with all of those extra parts and inventory you don't need anymore. Then like you mentioned, there's poor forecasting. So now we're sending signals to the buyers that we need the stuff that we don't actually need. And that's the, and that system is very powerful. Um, it'll lack, because it's incorrect, because there's waste in it. You lack real time visibility. You can't really see just in time what you need. When we don't, uh, clearly see what we have and what's moving, inventory grows quietly like those six boxes of cereal that sit in your cupboard. Right. Um, and decisions are made later and with less confidence because we're not really sure what do we really have here. What do we really need here? Right. Because we want new flavors, and the old flavors have become obsolete. Then before you know it, there are seven, then eight, then 10 partially eaten boxes in your pantry. And, um, they're just growing more stale by the minute instead of finishing the smaller boxes and then buying the next flavor. So that's sort of the, you know, the compounding issue with inventory, both from a business standpoint and, you know, how you could use that at home.

Speaker C: Mhm. Collection of uneaten cereals. I'm trying to visualize what was going on in your pantry right now. Okay, time to close this out. Important thing to name right now. Overproduction is wildly considered the most impactful waste in lean because it really creates or even amplify almost every other waste. Overproduction sets the stage for friction way long before we feel that friction. Well, are you ready now to talk about a few practical ways to reduce and eliminate those two types of waste? Are you ready?

Speaker B: I can't wait.

Speaker C: You can't wait? Okay, so let's not wait because weight is another, uh, form of waste.

Speaker B: Okay. Oh, nice.

Speaker C: Okay. You know we're full of puns in this episode.

Speaker B: I guess.

Speaker C: So let's start with overproduction. Um, one of the most efficient ways to reduce or eliminate overproduction. It's really, we already touched on it is to produce to actual internal and external demand. Another key lever is identification of bottlenecks. So when bottlenecks exist, work often gets pushed upstream, which creates an excess of output. So increasing flexibility also matters. That's important thing. And then finally smaller batches just in time outputs. We already talked about it before in your example. So all of this make it super easy, um, for teams to adjust when the demand changes.

Speaker B: And then there's inventory. Reducing inventory starts with aligning stock to real demand, using just in time thinking like you just talked about. The closer that we replenish, uh, to the actual use, or the closer the replenishment comes to the actual use, the less inventory you need to carry. The I mentioned pool systems earlier, but pull systems like Kanban systems help control flow by signaling. Again, we talked about that word signaling earlier. When to replenish and when to stop. Instead of pushing work forward, instead of me constantly just, uh, continuing to stuff an overstuffed refrigerator that still nobody's going to get any food out of. Right. The goal isn't zero inventory. It's visibility and control. So it's time to wrap up for today, Tatiana.

Speaker C: The goal is zero inventory. It's visibility and control. Okay.

Speaker B: Yeah.

Speaker C: Time to wrap up. I think that we gave all the most important information, so no overproduction of information in this case in the episode. Sounds good. Very quickly, let's recap with the definitions that we already discussed during the inventory. If you're producing ahead of what you need over production, if it's sitting around waiting inventory and the reflection question for today is what are you creating right now to feel safe or in control, but you secretly wish you didn't have to manage anymore? See you in the next episode.

Speaker B: What an excellent question, Tatiana. To leave our listeners with, Join us for our next episode for the February Flow and Friction series when we talk about non utilized talent and waiting. Well, t, I think that's a wrap for today.

Speaker C: Okay. All right, see you folks next time on leanverse. See ya.

Speaker A: In this episode, we've talked about how overproduction doesn't usually feel reckless. It feels smart until the inventory starts managing you. We produce early to stay busy. We build ahead to feel ahead. We we stockpile work and things to feel secure. But before long, we're not creating value, we're just managing extra. In our next episode of Flow vs Friction, we'll explore waiting and non utilized talent and what happens when time and capability quietly sit unused inside of a system.

Speaker B: And if this way of thinking resonates with you.

Speaker A: The Lean Mastery Makerspace is now live inside the the Savage Simplicity ecosystem. It's a free space designed for people who want to practice lean thinking beyond the tools to see systems clearly reduce friction intentionally and improve without adding any noise. You can explore it at savagesimplicityecosystem Circle. So because life is hard, why not make it simpler? Lean Verse is hosted hosted by Bernadette Hill and Tatiana Sell. All episodes are programmed and written by Tatiana Sell, produced and edited by Bernadette Hill.