Workshop - Inventory Complete

Part of implementing visual control is knowing what you have. One of the prescribed methods for the Sort phase is to tag every item (Red Tagging). On each tag, data is recorded to describe, qualify and quantify the item.

I took a different route as you recall from my previous posts. Instead of tagging every item this round, I simply sorted into groups that matched my future state vision. I took this route because it didn’t make sense to red tag a pile and seemed like the quickest path for the task. If I were 5S-ing a wing of a manufacturing plant or a loan processing center, red tagging a machine or tool would make sense. Also, red tagging is a fun group activity that can build workplace camaraderie.

Next, I took inventory, recording every item into a spreadsheet. For each item, I recorded the following:

Name
Quantity – number of like items
State or fitness (excellent, good, poor)
Season (Year around, spring, summer, fall, winter)
Last 5 years? – Has the item been used in the last 5 years (yes/no)
Duration – is this item used in the last 3 years, 2 years, past year, monthly
Frequency – how often in that span or duration the item is used in days.
Replacement Cost – the current cost of replacing the item
Decision – keep in loft, reuse elsewhere, eliminate the item
Comments – thoughts on the decision or process
New Location (Green, Blue, Orange room)

Not only did the spreadsheet help me see what I have, but also helped me decide what to keep and what not to keep. Quantifying and qualifying the items in terms of use, state and cost of repair are critical. Note to self: add “audit loft inventory” in project plan.

Thinking broadly, lots of companies have inventory systems. But it has been my experience that businesses often struggle to keep the inventory current and often rely on best guesses. Some of the root causes to this problem include organizational change, poor communication, lack of visual control, failure to sustain or lack of repeatable processes.

4-5 years ago when the financial sector was on a crazy pace, banks were opening branches in highly competitive markets and closing those branches that under performed. We discovered that all inventory from the closed branches for one particular bank went to storage and all new equipment was purchased for the new branches. Inventory ($) was growing rapidly with no stop in sight. Neither management nor the process leaders understood their inventory. I lead one day Kaizen event and two week implementation that redesigned the branch close and open processes. New branches now reused inventory from closed branches. The new process reduced inventory and provided a cost avoidance benefit of $1.6MIL over the next fiscal year.

Solving for these root causes can lead to personal satisfaction and a safer, more efficient workshop at home. In business, solving these root causes can save hard dollars.