The 8 Forms of Lean Waste, Applied to Business: Inventory

man holding clipboard checking inventory
Inventory is an oft-forgotten component of office management, but has key implications for your office's operations.
Carroll Elger|
December 20, 2018
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In manufacturing, “lean manufacturing” or simply “lean” has become a dominant management philosophy, deciding much of how the manufacturing component of the supply chain is handled to maximize efficiency of resources. Lean focuses on minimizing waste by identifying activities that add value and separating them from those that don’t, emphasizing the elimination of those that don’t.

 

Due to lean’s success in the manufacturing industry, managers in other industries began to adapt lean to their work, including business managers. Lean management has become a staple of some contemporary offices, modified to fit the white-collar workplace.

 

A key tenet of lean is the understanding of the “8 Forms of Waste”. Waste, in this context, is defined by goleansixsigma.com as, “any step or action in a process that is not required to complete a process (called “Non Value-Adding”) successfully.”

 

Ideawake has found that our clients often set innovation challenges for their stakeholders that involve trying to reduce one or more forms of waste. We believe this is an excellent goal to have when using Ideawake so we’re producing this series of posts covering each individual waste and how Ideawake’s innovation management software could potentially be used to address them. The 8 types of waste are as follows:

 

  1. Defects
  2. Overproduction
  3. Waiting
  4. Non-utilized Talent
  5. Transportation
  6. Inventory
  7. Motion
  8. Extra-processing

 

Inventory

In lean, inventory waste can refer to actual inventory being wasted or inventory indirectly causing resource waste. Inventory management is a key principle of lean methodology as the fluctuation of inventory levels can have widespread impact on operations.

 

When evaluating inventory levels in manufacturing, managers must take into consideration the amount of inventory they want to store, how long they want to store it, and where it will be stored. If not planned properly, all of these conditions can cause inventory waste.

 

Interested in seeing Ideawake’s platform? Book a demo here

 

Deciding on an appropriate amount of inventory to store comes down to being ready to serve the customers in your industry. Holding too much inventory can cause issues in some industries, especially those with short buying cycles. In the fast fashion world, inventory levels must be kept low, as the amount of time a piece of fashion is in demand can be very short. A large amount of inventory of a product in fashion may need to be heavily discounted or even go unsold, resulting in noticeable waste for a low-margin industry. Choosing how long to store inventory can have an impact on waste as well. For example, a dairy manufacturer has to give careful consideration to the time inventory is held, as holding dairy products too long could cause products to spoil. Where to store inventory can lead to indirect wastes. If production levels are raised and additional space is needed, without proper planning that space may not be as accessible as previous storage space, resulting in higher inventory costs and consequently waste.

 

In business, inventory waste is not nearly as common but can still occur. Firstly, businesses typically have their own, albeit much smaller, inventory space that needs management. If inventory is allowed to surpass this space, waste will occur when more space must be purchased or employee time must be dedicated to handling the inventory overflow.

 

More common in an office setting is waste resulting from too little office inventory. If inventory runs out frequently and isn’t restocked at regular intervals, employee productivity will be compromised when they don’t have the supplies they need. Management of this inventory can be crucial to keeping employees productive as well. Office supplies should be audited and organized in an easily accessible manner just like in a factory.

Inventory management is a key consideration for an efficient office space. Dealing with inventory can be a daily interaction for many employees, so idea management platforms like Ideawake see a high idea submission rate in relation to office management. If you feel your company could improve its office and inventory management, book a demo of Ideawake here, and we’ll connect you with one of our innovation experts at your earliest convenience.

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