Inventory versus downtime

Manufacturing operations focus on maximizing the amount of product that

they’re able to make in a given period. Sometimes, manufacturing processes need

to be shut down. Planned shutdown times typically are scheduled around the

shifts that people work or so that the company can perform maintenance or

change over equipment to make different products.

Unplanned shutdowns also happen for a variety of reasons, all of which are bad.

An unplanned shutdown could be caused by a power outage, a broken piece of

equipment, a strike, or a new government regulation. An unplanned shutdown

also can be the result of running out of raw materials. You can’t make a product

unless you have the components that go into it.

One way to prevent unplanned shutdowns due to maintain high inventory levels.

But that extra inventory ties up working capital and requires additional warehouse

space. Lean Manufacturing techniques can help to minimize the number of

unplanned shutdowns caused by inventory stockouts while also minimizing the

amount of inventory in a supply chain.

One of the key elements of Lean Manufacturing is the use of a kanban for inven-

tory replenishment. A kanban is an automatic reorder trigger for inventory.

Containers can be used as kanbans, for example. When the last item is pulled from

a container, it’s time to order a new shipment. This process provides a smooth,

step by step flow of inventory. When you use a kanban system, there’s no way for

inventory to be pushed down to the next step in a supply chain; it can only be

pulled by the downstream kanban.

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