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==={{wasteprov|Over-processing}}=== | ==={{wasteprov|Over-processing}}=== | ||
'''Headline''': '' | '''Headline''': ''Don’t design your plane to be waterproof in case it falls into the sea. Design it so it doesn’t crash.'' | ||
In its original physical manufacturing sense, {{wasteprov|over-processing}} refers to ''unnecessary | In its original physical manufacturing sense, {{wasteprov|over-processing}} refers to ''unnecessary [[complication]] in design'', whether brought about through carelessness or over-specification. The production cost of features that realistically no-one will ever use is as much a form of wastage as any. | ||
The chief production cost in contract negotiation is ''time'' and ''human resource''. The longer a contract takes to read, and the more it invites challenge<ref>Which will be, in part, a function of its length | The chief production cost in [[contract negotiation]] is ''time'' and ''human resource''. The longer a contract takes to read, and the more it invites challenge<ref>Which will be, in part, a function of its length — there more there is to read, the more there is to challenge.</ref>, the more expensive it is to produce. ''Any'' time taken over the bare minimum needed and ''any'' client challenge to a term that is not really vital the firm’s risk protection strategy is a waste in the contract negotiation process. | ||
As we have seen, client challenges to credit terms create their own additional wastes ({{wasteprov|waiting}}, {{wasteprov|transport}}, as well as risking of {{wasteprov|overproduction}} and {{wasteprov|defects}}). | As we have seen, client challenges to credit terms create their own additional wastes ({{wasteprov|waiting}}, {{wasteprov|transport}}, as well as risking of {{wasteprov|overproduction}} and {{wasteprov|defects}}). | ||
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While [[credit]] teams do not typically monitor or collect data about the frequency with which they invoke specific credit terms, we know for sure that: | While [[credit]] teams do not typically monitor or collect data about the frequency with which they invoke specific credit terms, we know for sure that: | ||
*Well over 90 | *Well over 90 per cent of client contracts ''never [[default]] at all'', | ||
*Of those contracts which ''are'' closed out, in nearly all cases the cause of default is failure to pay or insolvency. | *Of those contracts which ''are'' [[closed out]], in nearly all cases the cause of default is a [[failure to pay]] or [[insolvency]]. Counterparties will generally not challenge these two [[Event of default|events of default]] during the negotiation process (how could they? that you will pay what you owe when you owe it, and that, by extension you will be solvent enough to do it, are your counterparty’s most fundamental expectations. If you won’t commit to these, you should get your coat.) | ||
====[[Barnacles]] and the effluxion of time==== | ====[[Barnacles]] and the effluxion of time==== | ||