Lean manufacturing and reduction of inventory – is it a result or a goal
Inventory and work in progress are words very closely associated with lean manufacturing. They are so closely associated with each other, some even use inventory reduction interchangeably with lean. Some also think we should get read of inventory from the system completely with any cost to make the system work effectively.
As I always stress, lean actually is commonsense manufacturing. Inventory is a very critical component in any manufacturing system and a part of the lean classification of its eight wastes. But removing one waste in the cost of another is not lean way of thinking. Any waste should be removed in a way where it will create value to the end customer and the organization. Inventory is not an exception. Reducing inventory at the cost of level production, continuous flow will not help the customer neither the organization.
In any organization WIP or the inventory is a reflection of the problems the system contains. Higher the WIP or the inventory in other forms problems will be hidden in it and system is not lean. When the problems are removed from the system the inventory level will go down automatically. Introduction of pull manufacturing systems, just in time manufacturing, make to order processing will in fact reduce the system inventory considerably.
So it is obvious that lean and inventory has a very closer relationship. But inventory reduction is not lean. Application of lean techniques will reduce inventory levels. So inventory is only an index which will show you how effective your lean implementation is. Trying to reduce the inventory levels without treating the causes will have a net negative effect on the system.
As I always stress, lean actually is commonsense manufacturing. Inventory is a very critical component in any manufacturing system and a part of the lean classification of its eight wastes. But removing one waste in the cost of another is not lean way of thinking. Any waste should be removed in a way where it will create value to the end customer and the organization. Inventory is not an exception. Reducing inventory at the cost of level production, continuous flow will not help the customer neither the organization.
In any organization WIP or the inventory is a reflection of the problems the system contains. Higher the WIP or the inventory in other forms problems will be hidden in it and system is not lean. When the problems are removed from the system the inventory level will go down automatically. Introduction of pull manufacturing systems, just in time manufacturing, make to order processing will in fact reduce the system inventory considerably.
So it is obvious that lean and inventory has a very closer relationship. But inventory reduction is not lean. Application of lean techniques will reduce inventory levels. So inventory is only an index which will show you how effective your lean implementation is. Trying to reduce the inventory levels without treating the causes will have a net negative effect on the system.
1 comments:
I could not agree more with your inventory thoughts. I have seen many times when a company sets out to reduce inventory as a stand alone system with disastrous results. It can sometimes get reduced as a separate system, but it is often necessary to utilize the pull systems, supplier setup and cycle time reduction, and company setup and cycle time reduction, etc.
Inventory is a huge waste, but without eliminating the reasons for the inventory in the first place, the problems will only get worse.
Good lean manufacturing training will explain this in depth.
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