Elimination of waste - Stock Management

Here is a definition of the elimination of waste:

Anything other than the minimum amount of equipment, material, parts and working time which is absolutely essential to production. 

Reported in Monden (1983) 

This means: no surplus, no safety stock, no de-coupling inventories. If you can't use it now, don't make it now! These ideas have led to the goals listed below. 

Zero inventory (ZI)  - Hold only enough to work on and restrict the level of additional inventory whenever possible. 

Zero set up times - Reduce to an absolute minimum so that handling small batches becomes more efficient. The Japanese achieve this by concentrating on customising machinery to make the necessary adjustments quicker and easier to do, and also by increasing motivation to make a quick changeover. Speed is not only required but the absence of buffer stocks highlights the fact that the set up time is crucial to keep production moving. 

Zero lot sizes - Handle only one at a time. Don't use the EOQ approach . 

Zero material handling - Handle only one. Reduce the need for sophisticated equipment. 

Zero surging - Don't disrupt the flow due to overloads. 

Zero breakdowns - Plan for prevention. 

Zero lead times - Reduce to a minimum. The JIT philosophy completely rejects the EOQ theory. In its place, an approach to improve material flow has been substituted. 

There are seven basic elements to JIT philosophy, we will consider the first five of them here. Remember that the objective is to eliminate waste: each approach is directed towards improving material flow efficiency and eliminating non-value activity. 

• ? focused factories
• ? group technology (GT)
• ? Jidoka (quality at source)
• ? Kanban (JIT production)
• ? uniform plant loading