Time
9 hours 3 minutes
Difficulty
Beginner
CEU/CPE
9

Video Transcription

00:00
Hi, guys. Welcome to Quick Hits inventory. I'm Catherine MacGyver, and today you're going to learn the ability to identify the waste of inventory.
00:10
So if you remember back to our downtime acronym inventory stands for the eye, and you guys are almost there for all of our eight deadly wastes.
00:20
All right, so when we're talking about the waste of inventory, what we're talking about is finished products. So this is inventory that is an excess of customer demand. So if you think back to our pizza place example these air going to be finished pizzas that are sitting on the shelf waiting to walk out the front door
00:39
it is different than overproduction, because overproduction is the individual components. So more upstream processes inventory is going to be what happened at the end of your process. So when you have completed it, either it be
00:53
finished products. If it's information, um, newsletters can sometimes be argued
00:59
that there are a waste of inventory if you send them out to mass volumes on your email list. But this is going to be something that is complete, and at its end, user customer
01:11
excess inventory can, because by a few things, but primarily this is going to be back to that forecasting issue. If you remember
01:19
talking about overproduction, if we over forecasted we inherently had overproduction because we need more smaller parts to make a finished part, of course, overproduction. If we have upstream where we're creating
01:34
too many items were, it makes sense to just go all the way through the process and finish the completion for those over produced upstream items. You also have poor monitoring or poor process controls. And what this means is basically the inverse of forecasting. If you just keep making widgets
01:53
um,
01:53
Lake Lucille Ball and the Chocolate Factory, without realizing that your store your warehouses full, that would be an example of poor monitoring. Poor process controls would be our do. We keep running the process independent of customer needs. So
02:10
with that, excess inventory is really able to be resolved with the just in time production. So we talked about
02:17
in lean principles this idea of flow and making something when we need it. So having one item go through the entire process as much as possible when the customer request it on the other one is communication feedback loops So
02:34
when we're talking specifically about overproduction and we're talking about sales forecasting, how do we have those conversations about? What do the customers really need as compared to what are we being ambitious about? Those were generally the easiest ways thio close excess inventory. Another way to do it is to
02:53
just have less inventory.
02:53
This is generally very anxiety inducing, where we just say we're going to cut our inventory supply by X amount because generally people who are customer facing want inventory to be available right away, with the exception of some of the custom builds or the maid to order shops.
03:14
So one of the ways that you can
03:15
just decrease your overall inventory level, your par level is by deciding how frequently you're going to resupply. So if you are going to fill your warehouse once a week, what would be one week's worth of consumption? And you could do some projections that way? And usually I recommend to add a 10 to 15%
03:36
safety zone on that helps with people's comfort love levels. But par levels are something that come into play later on in Greenbelt and black. But when we're talking about What is the right amount
03:47
right now from a you as a yellow about perspective. When you think about inventory, what you're going to want to be thinking about is do I have more stuff lying around that I could sew or give
04:00
in the case of an internal customer I could sell or give to our customer? Then I actually need to do our processes.
04:09
Um,
04:11
and what we're talking about the waste of inventory. Remember that this is very important, that this is finished product. This is something that can walk out the door today. We're not talking about individual components. If we are, that's the waste of overproduction. It is dependent on upstream processes.
04:28
So you're not goingto have inventory waste unless you have some level of overproduction somewhere higher up. So the relationship between what causes overproduction and what causes inventory the waste of inventory is very
04:42
closely related. As such, the solution for both is better communication with forecasting and customer needs, and then more of a pull or adjust in time or a flow process when it comes to production, rather than a stockpiling or adjusting case process.
05:00
Next waist up is the waste of motion. So I will see you guys then

Up Next

Lean Six Sigma Yellow Belt

This online Lean Six Sigma Yellow Belt course teaches you how and where to apply the Lean and Six Sigma process improvement methodologies. Once completed, you will have the knowledge to pass the Six Sigma Yellow Belt certification exam.

Instructed By

Instructor Profile Image
Kathryn McIver
Lead Instructor at Evidence-Based Management Association
Instructor