From the course: Lean Inventory Management
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Manage inventory buffers
From the course: Lean Inventory Management
Manage inventory buffers
- Lean inventory management starts with you and it must extend to everyone in your supply chain. The supply chain is made up of all the key companies that help you move your products and services to your customers like suppliers, distributors, and retailers. All of you should be working together to move inventory from one partner to the next just in time, just as it's needed to meet customer demand. You accomplish this by establishing strategic inventory buffers, by keeping a certain amount of inventory on hand at each stage of the supply chain. You set targets at each stage, allowing just enough inventory to serve the next partner in the supply chain. Here are some examples of strategic buffers. A factory typically sets an inventory buffer for manufacturing lead time which is the amount of time it takes to make the product. The buffer allows you to fill orders immediately when customers need products right away. If you have a long lead time, you must keep more buffer inventory…
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