is a list ofgoodsandmaterials, or those goods
and materials themselves, held available in stock by abusiness. Inventory are held in order to manage and hidefrom the customer the fact that manufacture delay is longerthan delivery delay, and also to ease the effect ofimperfections in the manufacturing process that lowerproduction efficiencies if production capacity stands idlefor lack of materials.
The reasons for keeping stockAll these stock reasons can apply to any owner or productstage.
is held in individual workstationsagainst the possibility that the upstream workstationmay be a little delayed in providing the next item forprocessing. Whilst some processes carry very largebuffer stocks, Toyota moved to one (or a few items)and has now moved to eliminate this stock type.
is held against process or machinefailure in the hope/belief that the failure can berepaired before the stock runs out. This type of stockcan be eliminated by programmes likeTotal ProductiveMaintenance
is held because the forecast and theactual sales did not match. Making to order andJIT eliminates this stock type.
Lot delay stock
is held because a part of the processis designed to work on a batch basis whilst onlyprocessing items individually. Therefore each item ofthe lot must wait for the whole lot to be processedbefore moving to the next workstation. This can beeliminated by single piece working or a lot size ofone.
Demand fluctuation stock
is held where productioncapacity is unable to flex with demand. Therefore astock is built in times of lower utilisation to besupplied to customers when demand exceeds productioncapacity. This can be eliminated by increasing theflexibility and capacity of a production line orreduced by moving to item level load balancing.
Line balance stock
is held because different sub-processes in a line work at different rates. Thereforestock will accumulate after a fast sub-process orbefore a large lot size sub-process. Line balancingwill eliminate this stock type.