Minimalism in Inventory Management
The concept of minimalism has recently exploded in popular culture. YouTube gurus and Marie Kondo, star of the Netflix original series “Tidying Up with Marie Kondo,” alike, have urged us all to adopt minimalist habits. There are some things you can learn from the concept when it comes to inventory management.
In an attempt to live practically, minimalists aren’t co-opted by our capitalist society. Moreover, they resist the compulsion to overspend on anything that isn’t necessary for daily use like clothes, furniture, or even food. This involves adjusting your mindset to anticipate your needs and sustain what is available. Essentially, breaking away from the “just in case” mentality of having extras stored away.
No more, no less
Stick with me here. This organizational fad not only applies to managing one’s personal life, but it’s also a quite useful concept in the management of the workplace. Minimalists reduce waste. Just an FYI, waste reduction will be a recurring theme throughout this article.
I challenge you to think on this: How would you function if your resources on hand were intended to last a week? Would you run out of food and toiletries, or would you have just enough of what you need to make it through the week? In the end, I bet you’d have a clearer understanding of how much you consume, and most importantly, how much you waste.
Going beyond organization and good housekeeping, I want you to focus more so on the idea of having only what is needed to function.
Moving on to the workplace…
Just in case vs. Just in time
Developed and perfected within the Toyota Motor Corporation, Just-in-Time (JIT) inventory management requires resources to be readily available to meet operational demands, without having a surplus.
JIT philosophy considers inventory a form of waste and has become synonymous with best practices of lean inventory management.
Toyota’s inventory management model allowed manufacturers to reduce their overhead expenses. It also ensured that supplies were readily available at the right time, as the product moved along the chain. Consequently, forecasting ascertains how many parts are needed at the point of use to avoid stock-outs.
Having extras stored away conflicts with both minimalist and JIT practices. That’s because anything superfluous is a direct contradiction of what minimalism means. Therefore, keeping inventory at a minimum should be based on what’s needed for production. The amount can vary and responds to the needs of the organization. Essentially, what’s in stock at a facility is what’s needed to maintain daily operations. This goes against our almost innate desire to have items on hand for those “just in case” moments.
Above all, the underlying principles of JIT practices are, one; continuous process improvement and, two; reduction of waste.
There goes that word “waste” again. This means that processes are routinely evaluated and modified to ensure that the organization functions optimally.
Effectiveness and efficiency go hand in hand
JIT theory argues an optimal level of inventory management. Evaluating your current circumstances determine this level. This will shine a light onto areas that incur waste. These areas can in turn be modified or eliminated if they don’t add value to the organization’s processes.
Further, we will explore this concept and examine the steps Animal Care Operations (ACO) takes to streamline its processes.
Assistant Director Charley Sikes spearheaded the overhaul of the University’s ACO. This required him to first evaluate the entire workflow of the operation – from the intake of supplies through its usage. Inventory waste and turnover were exhaustedly analyzed. In turn, he identified non-value adding steps in ACO’s operational chain and make suggestions for waste reduction.
Work in process inventory management
To remedy the situation, Sikes implemented a modified bin to systematize the ordering, management, storage and delivery of supplies. ACO maintains what is known as work-in-process inventory. You must assess your needs prior to purchasing to avoid over-spending. As a result, you can anticipate your inventory levels to be a week’s worth of supplies that are necessary for carrying out daily tasks.
The bins are located at the point of use with labeled shelves and their respective bins located below.
In a similar fashion to Toyota, forecasting is a necessary practice. You have to know how much of X you use within a given time frame. Moreover, a benefit of adopting a lean production strategy is its flexibility or adaptability as stock levels can increase or decrease as you see fit.
Sikes periodically audits ACO’s practices and procedures to anticipate stock levels and adjusts his purchasing behavior accordingly. If Charley notices that the team has run out of medium-sized gloves, he can simply adjust the amount of inventory maintained on-site to meet the demand.
Anticipation of needs allows for more predictability and stability to their orders. This is despite spending the same amount of money on inventory.
Once restock levels have been reached, the staff simply place the empty bins in the designated delivery zone. Secondly, the vendor will then pick up the empty containers while delivering the following week’s inventory. Their system works on a two-week cycle so that inventory floats out “in transit.” While empty bins are going out, fulfilled orders are coming in. As a result, this eliminates the need for on-site storage of items other than animal food. In addition, the vendor removes each item from its container, rendering trash a non-issue for the ACO.
Making it work for you
Adherence to JIT practices allows the ACO to experience increased efficiency. Additionally, it decreases waste associated with over-purchasing and unused inventory. Therefore, it has also improved information flows and provided relief from holding inventory long-term. This has consequently improved consistency in orders and regularity in the stocking cycle.
The ACO also noticed a positive financial performance as operating margins decreased.
Sikes explained that their new processes have enabled employees to focus on primary tasks, assured that supplies will be available when needed. Subsequently, work rate increases and we see a trim in the time employees would otherwise spend on lesser tasks.
It’s evident that minimalism contributes to ACO’s ability to operate at maximum efficiency. Animal Care Operations plays an integral role in academic research and are vital to an institution’s reputation. Because of this, we hope that other institutions take this into consideration and use JIT practices as a way to benchmark their organizational performance.