Inventory control is a key focus for many organizations that carry significant levels of inventory. Having excess inventory ties up cash, while insufficient levels lead to potential stock outs, and increased risk of losing customers.

Historically, operational leaders would tend to utilize min/max levels, or MRP systems to manage and trigger inflows of goods. The problem with this approach is that the reporting and exceptions produced from the system are only as good as the information contained within. From my experience, even the smallest businesses with limited numbers of skus are challenged to keep inventory accurate, so just imagine the challenges larger organizations face.

One strategy that many companies use today is the utilization of visual controls, a key tool from the Lean toolbox, as a means to identify current inventory levels, and to send the signal when replenishment is required. These visual (Kanban) systems have the advantage of reducing the probability that inaccurate system data will detrimentally effect the replenishment process, and tie replenishment activities directly to consumption rates, thereby keeping inventory levels in check. And we are no longer reliant on someone having to remember to run a report to determine what the short-term purchasing requirements are.

If your organization is challenged with inventory management, and you haven’t utilized visual tools for replenishment of inventory, consider trying this methodology with one category of inventory, and perfect the process before expanding its use. You many be surprised with the results.