Lean manufacturing focuses on eliminating unnecessary processes to deliver the best value to customers. Manufacturing inventory management software aids in implementing lean manufacturing principles by providing a system to identify any wasteful practices that can be optimized.
The result is a lean manufacturing process that can continually be reevaluated to cut waste and further improve efficiency. Reliable manufacturing inventory management software can also offer full visibility across business operations, allowing businesses to create better customer experiences.
What is lean inventory management in manufacturing?
In the context of manufacturing, lean inventory management refers to the process of refining a company’s supply chain and manufacturing processes. A lean inventory process embraces continuous improvement with the goal of further waste reduction, be it of materials, labor, or time.
An effective lean manufacturing process will improve efficiency, increase cost savings, and allow companies to offer more value to their customers.
Additionally, inventory does not earn any additional value until it is sold. Carrying costs of unsold inventory may even increase as time goes by and can add up year-over-year.
By implementing lean inventory planning and management, businesses can address production bottlenecks, cut storage costs, and train employees in lean procedures.
Ideally, a company that can successfully practice lean inventory management will have only what is essential at all stages of the manufacturing process—thereby optimizing the effort, material, time, and money spent at each stage.
5 core principles of lean manufacturing inventory management
There are five key principles that help companies increase efficiency and adopt lean manufacturing. Much of these are credited to the book published by James Womack and Dan Jones, titled Lean Thinking: Banish Waste and Create Wealth in Your Corporation.”
The main principles of lean manufacturing are outlined below, as well as how they tie in with lean inventory planning:
Value
Value refers to what customers are willing to buy. In the context of lean inventory management, this means being able to factor in customer demand when deciding how much to stock. Having manufacturing inventory management software can help businesses with inventory planning, maintaining optimal stock levels, and reordering.
Flow
Companies ultimately need to understand how inventory flows within the organization to successfully implement lean inventory practices. Through careful inventory planning, teams can consider exactly what, how, and when inventory is needed, thereby driving efficient production schedules.
Pull
Central to Just-in-Time (JIT) inventory management, a pull-based system refers to having products created only when needed and, in the quantities, required depending on demand. This is in contrast with push-based systems that center on demand, as dictated by historical sales data, to determine how much is produced.
Responsiveness
This refers to the ability to adapt to change, which in turn facilitates true lean manufacturing by avoiding increased carrying costs or stockouts. Among the best practices that may aid in responsiveness are demand forecasting, ABC analysis, and economic order quantity (EOQ) aid responsiveness.
Perfection
The lean philosophy ultimately strives for perfection—in manufacturing, managing inventory, or other business processes. As such, it follows that teams should always strive to seek continuous improvements in quality and optimization while reducing waste.
Lean manufacturing inventory management ultimately aims to minimize stock on hand, if not eliminate it. This is consistent with the lean philosophy’s core goal to eliminate waste at every stage of the manufacturing process while improving quality and value. By having manufacturing inventory management software, companies can gain full visibility of the manufacturing process and optimize resources at every turn.
If you are interested in learning how Fishbowl’s flexible inventory management solution can help your business now, you can book a demo.