Second type of non value added waste which is also called as Muda is Inventory. Inventory I would 2
say is one of the biggest waste, Inventory is something where the material is parked 3
and not having value added done on them. 4
So this inventory could be within processes. 5
So you have completed process number one and you are waiting for a process number two be completed and 6
then you have a pile of inventory between these two processes. 7
Or you might have a inventory of finished product which are lying in your warehouse, waiting for being 8
sold. 9
The problem with inventory is not just that money gets blocked. 10
There are a lot of issues with inventory. 11
The first thing as I said that money gets logged. 12
So whatever amount you have produced you're not able to sell. 13
So there is a money tied up to that for that you're paying interest, you're paying the cost of that money. 14
In addition to that your material might become obsolete. 15
A new version would come and you will have to reject that, you need space for storing that. 16
So in your factory you need additional floor area, you need to maintain that inventory to avoid 17
any rusting, damage. 18
So these are something which are because of a high level of inventory. 19
In addition to that inventory has another bigger problem because when you have a process number one 20
and process number two and in between these processes you have a pile of inventory, that's fine that 21
this is costing money. 22
This is costing the floor area. 23
This is costing the maintenance. 24
That's fine. 25
But in addition to that what does this do 26
is this inventory hides the problem. 27
How does this hide the problem. 28
Because the operator number one has done his job his or her job. 29
Not when it comes to operator number two. 30
So operator number two picks the piece from that inventory and starts working on that. 31
And then this operator number two sees that there is a problem in that piece. 32
The process number one was not done right. 33
This fellow will do what this fellow will pick another piece and start working on that. 34
Now what has happened is the defects which were produced by operater number one were hiding in this 35
pile. 36
So now operater number two has a choice to pick a new piece. 37
So he might not even raise the alert that there is a problem ongoing in operation number one. 38
So this is another big problem because of the inventory that it leads to defect being hidden in the system. 39
So this is a big thing which you need to look at in your work area and see that where you have big inventory 40
and how you can reduce that inventory.