What Is Point Of Use Inventory?

Over the past several weeks, we have been enriching
our blog with posts that detail the various facets of Lean manufacturing. The
overall theme, as you’ve likely been able to tell, is waste reduction. Companies
greatly benefit from reducing waste during their manufacturing processes. And
one of the simplest and most effective ways to minimize waste is to practice
point of use inventory.

How
is point of use inventory practiced?

As its name declares, point of use inventory is that
which is stored at the very location where it will be used. Instead of keeping
inventory in a warehouse or other secondary location until it needs to be
shipped to its user, it is kept at the point of use. Needless to say, this
allows for a significant reduction of wasted time. 

In addition, when inventory is kept in a location
other than at the point of use, it can make things difficult for manufacturers.
It makes it harder to determine discrepancies between the usage of the
inventory and the amount that is stored on hand. In many cases, there are
lapses.

On the other hand, when point of use inventory
practices are employed, workers are able to keep much better tabs on inventory
levels and their effectiveness on the floor. Those who work directly with the
inventory every day are the ones who best understand if too much inventory is
being stored or if there isn’t enough in stock.

What
are the main benefits of point of use inventory?

When inventory is kept at the point of use, it eliminates the need to constantly move materials from one area to another. This reduces the time within which products are manufactured and eliminates unnecessary man power as well. According to James P. Tate on Cogentmr.com, one of the biggest work center wastes (which he defines as non-value added activity) is the excess movement of materials.

“We move raw materials from the receiving dock to an
incoming inspection station; then to an inventory location; then, when needed,
to a work center,” he explains, “Tracking these movements (even with an ERP
system) can lead to confusion in the inventory management system. Work in
Process (WIP) often follows a similar routing. WIP goes from a work center to
an inspection station, then to an inventory location, then to another work
center.”

Point
of use inventory lowers quantities out of necessity.

In most cases, there just isn’t enough room along assembly lines to store a whole lot of inventory. Freeing up real estate is a key ingredient to having a smooth-moving and efficient production regimen. On Velaction.com, it is explained that point of use inventory helps to eliminate operation costs for secondary storage facilities.

“With rare exception, I encourage manufacturers to
keep as much of their inventory on their production lines as possible,” says
the site, “For one thing, having secondary locations and warehouses creates a
need for whole new processes. Someone has to manage the location, replenish the
line, build twice the racking and shelving, and update additional labels or
kanban cards with each change.”

For more information about how the Flux Connectivity team reduces waste through point of use inventory, please don’t hesitate to give us a call at 1-800-557-FLUX or email us at connect@fluxconnectivity.com.