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The Newsletter of Lean Manufacturing Strategy
October 2002
www.strategosinc.com
Inventory--Why All The Fuss?
Inventory reduction
is a persistent theme in Lean Manufacturing; but,
why so much ado? Some of the answer is that inventory
devours cash like
a black hole. Operating with less inventory frees cash for more
constructive use.
Inventory is expensive to keep. In
addition to the interest cost on money it requires space, insurance,
computers and stock-keepers. It is susceptible to damage and
obsolescence. The total annual carrying cost often runs 20%-60% of the
inventory value.
But there is much more. The
practices, techniques, policies and decisions that reduce inventory also
eliminate many other forms of waste. By reducing inventory, your
operation becomes more productive, more profitable and more responsive
to customers.
Our latest “White Paper” explores
some of these issues and offers new perspectives. You can find it on
our website at
www.strategosinc.com/inventory.htm
Best Regards,
Quarterman Lee
qlee@strategosinc.com
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©2007 Strategos, Inc.
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