Seven Wastes – Inventory

Today’s Guest Blog Author: Kris Chapman is the Vision Lean Manager at Trilogiq USA. Kris has 15 years experience in helping manufacturing facilities implement Lean Manufacturing principles.
Inventory-300x300Inventory is the next waste we will discuss and you are probably asking how do I identify inventory waste? Inventory waste is usually the result of a couple things that may not be obvious and usually shows up in three forms: raw material, Work in Process (WIP), and finished goods. Inventory waste is usually the result of overproduction and is a critical waste due to the money and space that it takes up. Inventory waste can be caused by a bottleneck in your process or maybe a buffer or safety stock was added to resolve another issue.

To identify inventory waste conduct a waste walk and try to spot it, you will probably be surprised by what you discover.

Start on the production line:

  1. Do you have a nice sightline into the production area; can you see operators making products or are you blocked out from racks with boxes or totes of material?
  2. Do you see product on the floor and on shelves in the work area rather than flowing down the line to the next customer?

Next, do a waste walk to through the warehouse and look for excessive amounts of material.

  1. Do you see pallets of material that are taking up multiple sections and possibly on the floor?
  2. Do you see pallets that are partially full or see any space on the racks between the skids?

If you answered yes to one or all of these, then you have inventory waste.

Setting up locations to match the box size to improve space utilization in the racks can reduce supermarket areas by up to 50%. This solution comes with a robust First in First Out (FIFO) concept as well as eliminating ergonomic concerns with picking up boxes on the floor level.

Another example of fixing inventory waste involves implementing smaller lot sizes line side for their material and delivering material more frequently. Rack sizes can be reduced, scheduled deliveries set up, and parts delivered only when the line is running. This improves sightline from outside the production line and improves 5S.