Reducing the Waste of Inventory in the Information Age
Posted: 06/24/2009 5:28:00 PM EDT | 3
One of the most familiar forms of waste is inventory, but is it also one of the most missed opportunities. Comprehending the costs of storing, managing and tracking inventory is straightforward. The costs associated with the risks of damage and obsolescence while inventory sits are also fairly obvious. Certainly inventory is something to be avoided. In the information age it can be harder to see, but just as costly.
Inventory is No Longer Just on the Factory Floor
In the information age, inventory does not exist merely on a factory floor or as raw material storage. Factory jobs and the creation of tangible products are moving into automation and lower cost workers in other countries, creating an entirely different work environment. Without a tangible product, recognizing inventory becomes a little more difficult; however, it is still a waste that has universal applicability.
Inventory is defined as a stock of goods, so anything that is stock piled, stored or saved is inventory. As today’s goods are moving toward service, design and innovation, inventory reflects the soft, intangible inputs and outputs of this activity. Intelligence, creativity and ideas, also referred to as the ninth waste, are forms of mental inventory.
Hard and Soft Files: Your Source of Inventory Waste in Today’s Work Environment
A universal example of inventory of today’s work environment is files. We all have reams of paper that may be taking up valuable space that we hope will be useful one day, and when we need a specific piece of paper, we have to shift, sort and search to find it. We take up valuable time organizing, filing and managing these files. Sometimes when we do go back and find something that we need, it is difficult to make sense of it, and we are left wondering what it was all about.
While hard files are a tangible source of waste, soft files are the invisible counterpart. Soft files are things we store on computers. As more stuff is stored, requirements for more and more space, which lead to real costs as we upgrade and purchase more memory.
What are you storing or holding on to that may benefit someone else, be it a file or a piece of knowledge? Just like garbage, what is trash to one is treasure to another. A seemingly insignificant piece of information to one person may be the key to unlocking a great solution for someone else.
Which files have become obsolete and are destined for the recycle bin? Passing knowledge or information along eliminates the waste of inventory and creates the flow of knowledge that can help improve the overall functioning of the business. What can you pass along or get rid of today? When the knowledge worker relies on information, information needs to flow.
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Nice post. I have dedicated a lot of time to tackling the second part of your idea -- what you call soft files. My new book "Far From the Factory: Lean in the Information Age" (http://www.amazon.com/Far-Factory-Lean-Information-Age/dp/1420094564/ref=sr_1_1?ie=UTF8&s=books&qid=1282749831&sr=8-1) focuses on this very point. Our conclusions are that factory style lean has been largely mis-applied on a superficial basis. In paper driven office there is a parallel to the factory (e.g.: the A/P process is the assembly of three physical components: the invoice, the PO, and the receiving ticket -- this is analogous to three parts coming together in a final assembly/processing operation). But in the computer era such a simplistic approach does not work. Web workers can routinely replace document information out-of-sequence (they get cc'd on an upstream email, they pull data off the vendor's website, they find previously used data stored electronically, etc.) The key point is that design documents are comprised of dozens or hundreds of information elements -- most workers need only a few and are adept at getting them out of sequence. The end result is redundant work, orphaned information, and errors all leading to re-work. In order to SEE these invisible information inventories and works in progress we need new techniques to map and redesign information flow. We use the Design Structure Matrix along with Lean/Kaizen techniques to achieve this goal.
I would be very interested to hear your reactions to our approach. And I would appreciate the opportunity to guest-post your blog.
Thank you and keep up the good work.