Inventory is a necessity – but at what levels? How much of a backlog is necessary to keep production moving at a steady rate?
In his Inbound Logistics blog post, Inventory…What a Waste, Paul A. Myerson makes a strong case for reducing excess inventory, pointing out that “excess inventory is a symptom of underlying problems in a process.”
“In lean terms,” he writes, “inventory adds no value for the customer, because it covers a process’s variations or wastes, such as long setup or changeover times, late deliveries, scrap, and downtime.”
If there is a problem, how do you diagnose it?