Inventory: The Invisible Waste

Inventory's Manufacturing Golden Days

For years, Inventory had a good thing going, quietly destroying value by tying up capital and resources. On his best days he could destroy huge value when the contents of the inventory were made  unusable and obsolete by an engineering change order.  The best part he was invited to the party because Master Schedule production methodologies required companies to maintain large inventories of parts to “efficiently” meet their production schedules. His days were numbered as more and more manufacturers got good at reducing inventories  through the adoption of lean manufacturing techniques such as Just In Time manufacturing and Pull based systems.

Inventory in Software

Fortunately for him, Inventory found his true calling in software development where he could discovered his super power of invisibility. Few software organizations were even aware of inventory, let alone looking for him in the form all the intermediate work products of an undelivered feature, from designs, to objects, to unfinished test plans. In manufacturing inventory took up space, it was accounted for…people could  even trip over it. It only took some smart accounting to show what a waste Inventory represented and how it impeded the ability of manufacturer to learn and adapt. But in software, oh my Inventory was in heaven because the software industry gave Inventory a “cloak of invisibility”.  In software almost no one talked about inventory, work in progress, and he could remain hidden as simply bits on disks. But those warehoused “bits on a disk” tied up capital and could be made obsolete (or require expensive rework) just as easily as physical parts in manufacturing. But what made inventory ecstatic, no one seemed to care! He was free to do what he wanted, and no one even suspected he existed.

Inventory's Vulnerability

Inventory protection comes from the fact that in software he is generally invisible. He can be easily exposed using a "Big Visible Information Radiator (BVIR)" like a Kanban board that shows Work in Progress (WIP). Once revealed, he can be summarily dealt with.