A backlog is every customer order that has been received as an order that has not yet fulfilled the customers request.

  Inventory waste is any unnecessary storage of materials, products or information.


Examples:

1. Excessive raw materials.
2. Unsold finished goods.
3. Excessive amounts of MRO items.
4. Information and data that is being stored but not used.
5. Excess supplies, including office supplies.
6. Emails sitting in inbox.

Causes of excess inventory:

1. Working to a push system or a forecast.
2. Unbalanced workloads.
3. Buying to many of items.
4. Batching
5. Inefficient or poor planning and scheduling.

Solutions:

1. Build only to demand where possible.
2. Stabilize processes and use six sigma techniques to minimize variability.
3. Remove waste from processes so that inventory (raw,wip,fg,mro) can be reduced.

Question:

  What types of Inventory do you notice at home, work or other places?  How do you think that inventory affects the organization?

​**Place answers in Comments** 

  This type of work activity does not meet the criteria of value added work, mainly because a customer is not willing to pay for the product, service, activity or information.  However, the product, service, activity or information although not considered value added is necessary to either protect the company or comply with regulatory requirements. Because of this it must be performed by the organization.  This type of work is still considered wasteful.

Tip:
  Although business necessary work can not always be eliminated right away these activities should still be reduced or minimized as much as possible until they can be removed.