5 Key Principles of Lean Inventory Management

Together, five key principles work together to help companies meet the main goal of lean inventory management: increased efficiency.

The basis of these principles comes from a 1996 book by James Womack and Dan Jones, founders of the Lean Enterprise Institute and the U.K. Lean Enterprise Academy. In Lean Thinking: Banish Waste and Create Wealth in Your Corporation, the authors laid out the main principles of lean manufacturing.

For the purposes of lean inventory, Womack’s and Jones’ concept of the “value stream” is often expressed as “responsiveness.” The value stream looks at the entire product lifecycle, from raw material to eventual disposal. Responsiveness is a narrower concept, concerned with staying nimble enough to pivot inventory to meet changes in demand or supply.

1. Value:

Under the five Lean principles, value refers to what customers want and will pay for. From an inventory perspective, businesses need to factor in customer demand when determining how much and what inventory to stock. Determining this is a function of demand planning, a cross-functional process that helps companies give customers what they want — thus minimizing excess inventory and dead stock.

2. Flow:

To apply lean inventory practices, companies must understand how inventory flows within the organization. A solid materials requirements planning (MRP) practice asks three questions, with responses dictating flow: What is needed? How much is needed? When is it needed by? The answers need to drive production schedules.

3. Pull:

A pull-based system is intrinsic to JIT inventory management, where products are created only when, and in the quantities, required. Pull follows naturally from the flow process and contrasts with a more demand-centric push-based system, which relies heavily on historical sales data to determine production levels.

4. Responsiveness:

The flexibility to adapt to change helps head off increased carrying costs and out-of-stock situations. Inventory management best practices including ABC analysis, demand forecasting, and Economic Order Quantity (EOQ) aid responsiveness.

5. Perfection:

Striving for perfection encapsulates the lean philosophy — whether we’re talking manufacturing, inventory management, or any other process. Continuous improvements to improve quality and eliminate waste and inefficiency move companies closer to the ideal.

Read the full article

You Should Also Read:

How Does Information Technology Affect Supply Chain Management?
Logistics 4.0 and Smart Supply Chain Management
What is Cold Chain Management?

danish mairaj
Danish Mairaj

Danish Mairaj is a medical device expert with a strong focus on regulatory and quality compliance. He has been involved in managing clinical trial infrastructure including supplies and logistics. He has over 15 years of experience in the MedTech and Pharmaceutical industry. He is a certified Product Owner, Scrum Master, and Project Management Professional PMP. He studied Biomedical Engineering in Germany and MedTech Regulatory & Quality in Galway, Ireland. He contributes articles to the BRASI newsletter.

Share on Social Media:
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Comments (28)

  • Amelia June 5, 2023

    Very interesting info!Perfect just what I was searching for!

    my webpage; project management [Jamel]

  • Elsa June 19, 2023

    Very interesting info!Perfect just what I was looking for!

    Also visit my page :: exasm matrial (Jana)

  • Venus June 20, 2023

    I hage been absent for a while, but now I remember why I used to love this
    web site. Thanks, I’ll try and check back more
    frequently. How frequenmtly you update your site?

    Alsoo visit my blog; test nereves (http://www.wikizero.com)

  • Mai July 7, 2023

    Thanks a lot for sharing this with all folks you actually reconize what you’re
    speaking approximately! Bookmarked. Kindly additionally talk over with my site =).

    We may have a link trade agreement among us!

    My blog post: practice exam (https://sens-lab.org)

  • Brigette July 9, 2023

    I am impressed with this site, real I am a fan.

    my web-site pmp certification exam – Gita,

  • Ramon August 3, 2023

    I truuly enjoy looking at on tthis internet site, it has
    good content.

    Here iss my site; view (Heath)

  • Jaimie August 5, 2023

    It’s the best time to make a few plans for the longer term and it
    is time to be happy. I have learn this submit and if I could I want to counsel you some interesting things or
    suggestions. Maybe you could write next articles regarding this article.
    I wish to learn even more issues approximately

    My site кредит в новокузнецке

  • Lemuel August 29, 2023

    Very interesting information!Perfect just what I was searching for!

    Take a look at my webpage: answer cpc exam (https://Pdfmedia.net)

  • Katja October 23, 2023


  • Elliott November 21, 2023


  • Kandy November 29, 2023

    Hi there to every single one, it’s really a good for me to go to see
    this web page, it consists of useful Information.

  • Merlin December 17, 2023

    Hello, everything is going well here and ofcourse every one is
    sharing information, that’s really good, keep
    up writing.

  • Ursula December 20, 2023

    Промокод 1хБет на сегодня бесплатно – это
    отличная возможность получить дополнительные
    бонусы и преимущества при регистрации на популярном букмекерском сайте.
    Актуальный промокод 1xbet 1хБет – это одна из самых популярных и надежных компаний, предоставляющих услуги ставок на спорт.
    При использовании промокода,
    вы можете получить дополнительный бонус к своему первому депозиту или бесплатные ставки.
    Промокоды обновляются ежедневно, поэтому
    важно следить за актуальными предложениями
    на официальном сайте букмекера
    или в социальных сетях. Чтобы воспользоваться промокодом, вам необходимо зарегистрироваться на сайте 1хБет,
    ввести промокод в соответствующее поле при регистрации
    и сделать первый депозит. После этого вам
    будет начислен бонус или вы получите другие преимущества, указанные в акции.
    Не упустите возможность получить дополнительные бонусы и стать победителем вместе с 1хБет!

  • Nannette March 23, 2024


  • steveclarke March 29, 2024

    Awesome blog! Do you have any hints for aspiring writers?
    I’m planning to start my own blog soon but I’m a little lost on everything.
    Would you recommend starting with a free platform like WordPress or
    go for a paid option? There are so many options out there that I’m completely overwhelmed ..
    Any tips? Many thanks! Life Experience Degree

  • Jeannie April 29, 2024

    доставка цветов

  • Hilton June 4, 2024

    На маркетплейсе Kraken представлен широкий ассортимент товаров,
    от электроники до предметов домашнего обихода.
    как зайти на кракен с телефона Продавцы со всего мира
    предлагают уникальные и эксклюзивные изделия, которые не встретишь в обычных
    магазинах. Чтобы найти лучшие товары на Kraken, используйте фильтры и категории,
    которые помогут вам сузить круг поиска.
    Также советую обратить
    внимание на раздел Эксклюзивные предложения, где
    собраны товары с большими скидками и ограниченным
    количеством. Интерфейс Kraken удобен
    и понятен, что упрощает процесс выбора и
    покупки товаров. Оплатить заказ можно различными способами, включая криптовалюту.
    Служба поддержки всегда готова помочь с
    любыми вопросами и решить любые проблемы.
    В целом, Kraken — отличный выбор для тех, кто ищет уникальные и эксклюзивные товары по выгодным ценам.

    Найти лучшие товары на Kraken не составит труда.

    Советую также заглянуть в
    раздел kraken5 at, где собраны самые топовые предложения этого месяца.


Leave a comment

Sign in to post your comment or sine up if you dont have any account.

Table of Contents