Don’t get bog down by these words.. Inventory..

All the material which is not getting processed on the machine ie not directly in production cycle is all inventory only. This then covers material in Raw material stores, material under inspection, material in pipeline at vendors place, material in transit and material waiting behind the machine for processing. Also this includes all material which is in FG form and is being sent to end customer. Only the form of inventory will keep on changing and also the accounting entries will change but all remains inventory only.

All the inventory is nothing but the money blocked in the business cycle. So lesser the inventory it is better.

As we have seen in my one the earlier blogs, inventory is one the 8 wastes in  Lean manufacturing concept.

In my next blog I’ll explain you various methods of inventory control.





Ulhas Pujari