How to reach new record lows on inventory and waste metrics

Waste is typically created because of overburdened manufacturing processes, and through uneven workflows. The secret to leveraging packaging and manufacturing efficiencies is in implementing processes and process flows that identify waste at its points of origin, and then seek to eliminate them.Implementing Lean InventoryMaintaining low inventory levels is a function of achieving metrics such as Optimal Levels and Reorder Points. Excessive inventory is a drain on production efficiencies, and can encourage waste – as measured by metrics such as waste per unit, percentage of non-recycled materials or volume of raw materials inventory not converted into finished products.With specific respect to inventory management, the ultimate objective of being “lean” is to ensure that there is always adequate inventory to support production targets, while not having an over-stock or stock-out situation. In balancing these lean objectives, lean manufacturing practitioners eliminate waste and drive down costs.Large brand-named companies, like Nike, Intel, Caterpillar and Ford all embrace lean inventory to drive productivity gains throughout their supply chain. However, efficient packaging an manufacturing improvements can be implemented by smaller companies using lean inventory management processes to keep inventory in check and achieve key waste metrics.Tools of The TradeTwo very popular approaches to control waste and manage inventory are:

• The 6S process designed for waste reduction and productivity optimization
• The “Ask Why” approach

1. 6S

A popular approach to increasing production efficiencies is through implementing the 6S model of process improvement. Since holding optimal inventory and reducing waste are hallmarks of an efficient system, the 6S’s can help organizations meet key metrics designated for both these objectives.Here’s what 6S entails:

1. Safety: Whether it’s reducing inventory or eliminating waste, all steps designed to accomplish those goals must have safety as a cornerstone
2. Sort: Segregate the “must have” within a work environment, and eliminate what’s “not required”
3. Set up/Organize: Take time to rearrange whatever is left
4. Shine (Clean and Solve): Make sure everything related to the workplace is cleaned up regularly
5. Standardize: Continually enhance the standards of the first four S’s
6. Sustain: Embrace a discipline of consciously following all of the S’s throughout the process

2. Ask Why (5 Times)Another often used tool for identifying opportunity for process improvement is by using a simple technique called “Ask Why”. If there is an inventory management challenge, or a problem bringing production waste in line with efficiency metrics, manufacturing efficiency practitioners will recommend “Asking Why 5 Times” – or until you determine the root cause of the issues.The number “5” is an arbitrary choice and, depending on the complexity of the waste management challenge or inventory control problem, could be 6, 7…or whatever it takes to identify the underlying issues.Achieving designated metrics for packaging and manufacturing efficiencies is often an iterative process. You set a goal for the company or individual production processes. You implement tools, such as 6S and “Ask Why”, and compare the results against the performance metrics. Over time, you realign your processes and work-flows, and reduce the amount of inventory on-hand and the levels of waste acceptable at each process until they reach optimal levels.

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