FITT Facts: Waste #2

Waste #2: Inventory.

Inventory refers to the unnecessary storage of materials (raw or finished goods), supplies, products, information, data, etc.

Although some inventory (a.k.a. buffer inventory) can be deemed necessary due to supplier lead times, sourcing challenges, cost or delivery constraints, the goal should be to minimize or eliminate inventory.  Inventory is a cash flow killer that ties up money in stuff that just sits and doesn’t create any value.

Remember: if you ever find yourself justifying a waste with “that’s the way we’ve always done it,” then you probably have an opportunity for savings and improvement.

Inventory Waste Examples	What to do about it…
Keeping many years of order history, physically or electronically, when the data is never/rarely looked at or used.	Why do you keep it in the first place?  Only keep history of changes and the previous two orders.
Buying “extra” office supplies because you ran out once.	You need an inventory replenishment system with min/max/restock quantities, trigger levels, and process owners.  Kanban can be a simple system that doesn't require an ERP or fancy software to implement.
Producing/storing too much raw/finished product for a customer because they will “eventually use it” and you “won’t have to purchase/run it as often.”	Work with suppliers to determine ideal/minimum order quantities and lead times that maximize cost and value.  Work with customers to get consumption forecasts.  Improve setup times so that many shorter runs is more cost effective.
“It’s cheaper if I buy 10,000 rather than 1,000.”	Sure, the per unit cost may be less, but what if the product becomes obsolete?  What else could you do with the space needed to store so much?  Find the sweet spot  between cost, storage space, customer demand and lead time.
Leaving all your e-mails in your inbox.  Also applies to files in folders on your computer/network.	Create files and sub-folders to organize your e-mails.  Really ask yourself why you’re keeping all those e-mails in the first place.  Think of the time spent scrolling through your inbox/folders to find that one e-mail/file.  Keep it clean and current.

Be FITT!

The Launch of FITT Facts

At Ideon, we've been on our Lean journey at since 2010, in which time we've cut amazing amounts of waste out of our processes across the entire company. Right from the beginning we wanted to make Lean our own, something that we could all rally around and take pride in. To achieve our unique Lean identity we had a company-wide naming contest from which came the winning name FITT, which stands for Finding Innovation Through Teamwork.

Part of our continued FITT journey involves me, a Certified Lean Blackbelt, delivering training to our Team Members on many Lean tools and topics such as 5S, set up reduction and an introduction to Lean with my FITT 101 course.

I was ing FITT 101 to a group of Ideon employees the other day when I was inspired to start sending out e-mail teachings on a weekly basis to keep the ideas, topics and learnings from my Lean training at top of mind; and with that, FITT Facts was born.

FITT Facts will be a resource to help teach about Lean through Ideon's and my own wins from completed projects, information and examples of lean, and even the history of lean. To help launch FITT Facts I will be touching on each of the forms of waste in no particular order. The forms of waste are at the foundation of lean; all lean activities/kaizen are ultimately meant to reduce or eliminate these forms of waste.

Waste #1: Transportation. Transportation waste is defined as the unnecessary movement of people, products, material, information, supplies, etc..

Here are some transportation waste examples and ways to reduce/eliminate them:

1. Pushing anything on carts or dollies over long distances. Instead, receive/store at point of use/occurrence. Also, aim to do packing or boxing immediately at the end of a production line.
2. Inefficient route planning (sales and drivers). Take a few minutes and plan your route and/or group all close destinations together.
3. Printing a report and walking it around an office. First off, do you even need the report? Find out who needs the report and what specifically is needed, maybe you can cut down some of the report processing time. Next, e-mail or electronically share the report using cloud technology instead of walking it around.
4. Using forklifts to move materials. Some easy solutions to this are changing the area layout to reduce driving distances and/or create circular paths. Ultimately though, AGV's (Automated Guided Vehicles) are ideal but can be cost prohibitive for small and medium size businesses.
5. Walking to get a common-use tool, supply or item. It's time to create a new home for the thing you're walking to get, sometimes and ideally this can mean getting multiples of the same tool. If multiple homes is not an option then find a central home for all people to access it. A detailed example of this waste is to place a printer centrally in an office rather than in the far corner.

Some of this stuff sounds simple and obvious, but you would be surprised how often people continue to do something a certain way because it's THE WAY WE'VE ALWAYS DONE IT and have never stopped to ask WHY?

Stay tuned for more FITT Facts. There are many Lean professionals out there, I'd love to hear their comments and ideas on these topics.

Be FITT!

Thank you Lena (aka Lean-a), James and Colin for the inspiration.