Lean principles<\/a> focus on eliminating waste and promoting value-adding activities. In theory, this should<\/i> mean Lean inventory management aims to reduce warehouse levels to zero.<\/p>\n But that\u2019s not practical \u2013 or profitable. It also oversimplifies Lean principles, which divide activities into value-adding or non-value-adding<\/a>.<\/p>\n Idle stock adds no value. But material moving through the production line efficiently, spending minimal time in storage and not hogging space that could be used to create a saleable product, falls into the value-adding category.<\/p>\n So, we apply Lean principles in manufacturing inventory management to:<\/p>\n 1.\u00a0\u00a0\u00a0\u00a0 Add value<\/b> \u2013 First, figure out what the customer sees as valuable so you can focus on maximising that value in the following stages<\/p>\n 2.\u00a0\u00a0\u00a0\u00a0 Create a flow<\/b> \u2013 Streamline inventory management processes to eliminate idle time and get your product moving<\/p>\n 3.\u00a0\u00a0\u00a0\u00a0 Pull on demand<\/b> \u2013 Once the flow is in place, implementing a strategy to pull stock when a customer requires it (rather than push-based on a producer\u2019s prerogative) follows naturally, optimising stock levels<\/p>\n 4.\u00a0\u00a0\u00a0\u00a0 Be responsive<\/b> \u2013 Flexibility comes when employees can focus on continuous improvement<\/a> instead of resolving issues, and it means responding to demand, innovation, market changes and suppliers<\/p>\n 5.\u00a0\u00a0\u00a0\u00a0 Perfect the process<\/b> \u2013 Continue reducing cycle times, improving product quality, trimming fat and cutting costs; while your operation may never be perfect, the pursuit of perfection is motivation enough<\/p>\n These are the 5 principles of Lean inventory management<\/b> in manufacturing, and they apply no matter the size or complexity of your organisation.<\/p>\n Ultimately, it\u2019s about optimising how raw material moves through the pipeline to deliver the best quality product and yield maximum ROI.<\/p>\n You might have implemented some Lean inventory management optimisations already without realising. There is a litmus test for Lean.<\/p>\n If you have examined part of your supply chain and made adjustments that have these 4 attributes, then congratulations! You\u2019re already on your way:<\/p>\n 1.\u00a0\u00a0Managing inventory<\/b> in response to demand, which looks like supply-driven forecasting<\/p>\n 2.\u00a0\u00a0Reducing waste<\/b> and unnecessary costs, usually by cutting idle time and rolling out better ordering protocols to avoid overstocking<\/p>\n 3. Standardising processes<\/b> as aa first step to enabling<\/p>\n 4.\u00a0Collaboration<\/b> across the business, so everyone is informed and working to the same targets<\/p>\n Getting the benefits of Lean, including cost reduction, product improvement and flexibility to innovate, demands a multi-pronged approach. You need to scrutinise each stage of the supply, storage and production chain to detect and eliminate non-value-adding activity.<\/p>\n Collaborating with your suppliers<\/a> ensures you can streamline ordering without overpaying for essential materials.<\/p>\n Jobman, an ERP software for manufacturers<\/a>, includes a fit-for-purpose inventory management module. Our system provides all the data you need to make informed decisions, identify value-adding opportunities, and continuously improve inventory management.<\/p>\n It might seem counter-intuitive, but holding small amounts of the most valuable stock allows you to survive in an emergency. For example, prolonged order delays or sudden demand spikes.<\/p>\n Our users rely on the data Jobman provides to trim costs and maximise profits. Jobman\u2019s intuitive inventory control functions<\/a> support Lean principles, while the full range of features brings your manufacturing business together into a single user-friendly interface.<\/p>\nWhat are the characteristics of Lean inventory management?<\/h2>\n
How to implement Lean inventory management in manufacturing<\/h2>\n
Maintain good supplier relationships<\/h3>\n
Use an ERP system to track inventory (and everything else)<\/h3>\n
Hold emergency stock<\/h3>\n
Why Australian manufacturers lean on Jobman<\/h2>\n