Continuous Improvement Training Program
A Continuous Improvement Program
Featuring 8-Training Modules by Bill Gaw

Increase the effectiveness of your
Lean Manufacturing Training Program
Lean Manufacturing Simulation Game 

Action Items

As a result of the inventory root cause analysis, a list of action items should be generated. The action items will address a resolution of the root cause of inventory and will in effect generally decrease the level of inventory dollars. The plan should reflect both short and long term projects and a dollar/measurement impact should be determined for each item. Availability of resources will dictate prioritization.

Responsibility/Accountability

Each functional area needs to be assigned inventory man­agement accountability. Specific individuals need to have assignments. This should be tied back to an inventory classification and/or the action items.

Inventory Management Plan—Business Issue!

Upon completion of identifying the action items, prioritiz­ing them, and assigning cross-functional responsibility and accountability, a formal inventory management plan can be developed. This plan should be the basis for establishing the annual inventory goals, performance or budget. It must also be factored into the business strategic plan. Top level management support is a critical and essential part of this process.

Inventory Management Plan Measurements and Goals

A business need or issue must be established to address an objective of an inventory management plan. For example, reduce inventory levels for a specific inventory classifica­tion, improve working capital, improve customer service levels, eliminate waste, increase inventory throughout, etc. A business must determine short and long term objectives and benefits that are linked to this business plan. The plan should be factored into the annual budget and forecasting process. It must also identify total invest­ment including people; create a simple approach; and measure results based on the impact on inventory. The dollar impact is one of the inputs to determining the inventory levels.

Communications/Feedback

The plan performance and successes should be communi­cated within the business unit. Personal and team recognition is a key element within this inventory management process.

Continuous Improvement

The inventory management plan is dynamic because of its ties to the business plan and should reflect improvements on an ongoing basis. The completion of action items and root cause analyses for the major inventory classifications will generate additional opportunities.

Summary

Inventory control is usually considered an issue with Manufacturing and in time of missed shipments or too much, a Materials problem. But inventory should be everybody's concern—Operations, Engineering, Market­ing, Sales, Finance, Purchasing, Quality and even the Supplier. All of these functions have an impact on the level and type of inventory. I propose the concept of Inventory Control is "out" and that Inventory Management is "in." Inventory management is a way of life and more specifi­cally a "planning process" which requires a cross-func­tional team approach and top management commitment to understand and address Inventory as a business issue. The "process" is not a program but, as mentioned, a process which requires an understanding of the relationships be­tween the internal/external customers' requirements, func­tional needs/impact and the business needs or objectives.