igned to identify and solve inventory system problems.2. Reduce your lead time - The longer your lead time, the more inventory you have in your system. A client with a 22 week customer lead time could produce a "rush" order in one week. The manufacturing process was the same. The difference was that the rush order didn't sit on the shop floor in long lines of WIP inventory waiting for something to happen. Don't put it on the floor unless you intend to do something with it. 3. Increase the velocity of your operation - The amount of inventory you have has little to do with your level of customer service. It has more to do with how fast you can replace it. If it takes six weeks to replace an item, you must reorder with at least six weeks (plus safety stock and "Just in Case" inventory) supply or you risk a stock out. If you can replace the same item in one day, a two day supply will give you more than enough to fill any order and a stock out is only for one day, not until the next batch is produced.4. Eliminate misalignment from your process - Many companies buy raw material in thousands, produce product in hundreds and sell in units. These misalignments create large quantities of inventory that run the risk of slow movement, obsolescence and damage, not to mention tying up valuable cash. Most companies justify this behavior based on "economies of scale". Careful analysis shows that this should be called "false economy of scale." Buy just what you need, produce at the rate of customer consumption. Refine your material acquisition process and change your manufacturing process to produce in smaller batches. Just in Time techniques are targeted at eliminating misalignment. 5. Clean your attic - Many companies want to be "all things to all people". I've had clients tell me, "If we don't carry that item (typically ordered once a year if that often), our customer won't buy from us." My response is "Where else would they go to buy it, no one else...
