How is Inventory Waste Measured and Reduced?

Inventory, Clothes Hangers. This image is CC0!

It is quite simple: number of items, space required for storage (count storage units, measure length or volume, calculate storage cost), cost of the items (buying or renting), or any combination of these.

The first and most important step is simple to name but difficult to achieve:

Some inventory is waste, but unavoidable, like an apartment or food reserves. Some inventory is important for you. Look at the book example. For years, I was thinking “these books are my reading life, if I give away books I give away my life.” Avid readers will understand what I mean. Only after putting a substantial part of our books into rented storage, I started to understand that this is at least questionable. If I never read an old book again, the whole value of it is seeing the spine from time to time, releasing fond memories of a distant past. When I made the value decision that these books are not that important, I did the first step. I must admit, I am still not fully where I could be with respect to book inventory. Nostalgia can be both something valuable and a burden.

The following table shows you the basic methods to address inventory in some categories. If for an inventory item more than one entry is appropriate, chose any entry or a combination. Usually, there is more than one option per entry. You can choose one or combine, but I suggest sticking to one option. This table is far from complete, but the methods should give you the general direction for any inventory waste.

Avoidable

Unavoidable

Any inventory, including those listed below

Option 1: Throw it away, give away, or sell it at once

Option 2: Put removal on your to-do list

Option 1: Throw it away, give away, or sell it at once

Option 2: Put removal on your to-do list

Option 3: Re-asses unavoidability regularly

Valued inventory

Option 1: Check if it is really valued, if not it is pure waste

Option 2: Use the Pareto Principle (wikipedia) to identify the top 20% with most value.

Option 1: Use it more often, honor the value, then it is no true waste

Option 2: Downscale, maybe something smaller is enough

Living and accommodation, including furniture

Option 1: If it is of high value for you, apply options for valued inventory

Option 2: See general methods (first table row)

Option 1: Be more at home and make it valuable

Option 2: Downscale (after reducing other inventory)

Letters and e-mail

Option 1: Throw it away or deleted it at once

Option 2: Do not answer, because answers trigger replies

Option 3: Politely answer that you do not want these messages

Option 4: Archive it somewhere where it does not disturb anymore, clear your archives every other year

Apply the waiting waste reduction methods

Work and to-dos

Option 1: Remove it from the to-do list without action (maybe informing people about this)

Option 2: Apply the waiting waste reduction methods

Apply the waiting waste reduction methods

Buffers (temporary inventory)

Option 1: Prepare things only when they are needed, not in advance (reduce over-production)[1]

Option 2: Let your buffers run dry, then use option 1

Option 1: Prepare things only when they are needed, not in advance (reduce over-production)

Option 2: Stop to produce buffered things as soon as the buffer contains enough for the next steps

Pure waste

Apply general method (first row of table)

Apply general method (first row of table)

 

In general, it is much easier to prevent inventory than to reduce it. In order to achieve this, the two most important strategies are to reduce waiting (a work backlog is inventory) and to reduce over-production (things not needed must be stored).

 


[1] In Lean production this is the change from a push principle to pull.

Posted in Waste Tagged with: , , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

*

HTML-Tags sind nicht erlaubt.

This site uses cookies.
Find out more about this site’s cookies.
Lesen Sie weiter:
Do an “Unused Inventory Removal Session.” Do it Now.

Exercise 27: Do an “Unused Inventory Removal Session.” Do it Now. If you did the last exercise, there should be...

How to Reduce Transportation Waste

Transportation waste can cost you a lot of money and time. Moving things around does not add much value. What...

Updated – Limited Time Only: Free “Lean Self Pocket Edition”

This Special Offer Has Ended! The good news: You still can get the Lean Self Pocket Edition for free. Just...

Schließen