"Inventory is time's shadow."
Robert W. Hall, author of Zero Inventories

Entire books have been written on inventory management, Just in Time, and the considerable economic, productivity, and quality improvement benefits of reducing inventories. In light of lean, world-class production methods and the Global Production System, a few specific points and wisdom from a Shingijutsu sensei may be useful.

Yoshiki Iwata said there are only two reasons for inventories: changes in production cycle time, causing fluctuations in partsuse rates, and delivery cycles that are long, e.g., only once per month. In those instances, inventory is required to "fill in" the lags in the cycle.

The ultimate goal, of course, is to standardize and reduce that cycle time. This effort in itself will reduce inventories. In the meantime, inventory may be a necessary evil but one that still can be the target of kaizen activity to reduce inventory levels and the wastes associated with them. Work from a mindset in which inventory is treated like a defect. Zero defects is one goal. Zero inventory should be a parallel goal.

"I've never seen a zero-defect rate company," said Iwata. "That keeps me in business. It is very difficult to get there. But inventory, like defects, should be very close to zero."

The impacts of parts shortages are often a major reason for keeping inventory. This reasoning is misguided. Iwata insists that keeping inventory does not help diminish parts shortages. "At Pratt and Whitney," he...