Any inventory above the minimum
amount required to safely meet customer demands it is consider as waste. Raw
materials and work-in-process not being processed it is also an inventory
waste.
Causes for Inventory:
Ø Poor Sales Forecasting so is Inventory
Planning/Tracking
Ø Long Process Setup and Cycle Times
Ø Unbalanced Production Processes
Ø Inconsistent Processes or Suppliers
Ø Inventory
exceeding specified quantity limit
Ø Excessive
safety stock
Ø Shortages
at critical assembly line
Solution for this waste:
Ø Little’s
Law states:
WIP (Work In Process) = Production
rate (or rate of product arrivals) x Lead time
Ø Batch
sizing or Lot Levelling
Ø Implement
Kanban system
Ø Visual
Inventory Indicators.
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