From the course: Lean Foundations
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Lean inventory
- Taiichi Ohno, the father of the Toyota Production System, had the right view on costs for his company. He once said costs do not exist to be calculated. Costs exists to be reduced. This is truer today than ever. And it is more true about inventory than ever before. Inventory is any asset you hold for a future sale. It can be raw materials, work in process, sub-assemblies or finished goods. And in today's world of global supply chains, you must also consider inventory that is being held throughout your entire system of suppliers and distributors. Holding large levels of inventory is no longer acceptable. It is simply too costly. Today, you don't hold inventory to meet customer orders. You make products as late as possible, but still have them available when your customer wants them. Lean inventory management means you meet demand but at the lowest cost possible. Lean managers make two important decisions about inventory.…
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