Priyer

Inventory in Lean Philosophy is one of the 7 Wastes in 7+1 MUDA.   Inventory stands for stocking of raw materials, finished goods, WIP Items created or piled, for future usage and deployment. It has evolved from Manufacturing where batch processing was on the rise and we had fewer customization of products. It made sense at that time, to stock materials well in advance, so that the products can be created on demand and manufacturers can reduce the time to market for their products, thus beating competition and becoming the differentiator.  Over time when this differentiator became the basic requirement, companies that had invested hugely in stocking various items in warehouses had found the cost of storage pinching their bottom line. That is when “Inventory” was identified as a Waste rather than a Vice.
In Lean Terms, Inventory is anything that is stocked, backlog, work in progress in a process, function or department that the Customer is not paying for. Only when the WIP is sold, then it can be converted to Revenue and add Value to the organization. Till that time, it is always cost.
Inventory in various industries can be as follows
Industry
Department/Function
Example of Inventory
ITES
Customer Support Desk
“Open Customer Tickets/ Requests” that have not been resolved.
Engineering
Development
# of Change requests at various stages of the SDLC Cycle. (Design, Develop, Test, Deploy)
Research and Development
Product Management
# of Product Features queued for Backlog to be released in Platform
Automotive
Painting
# of Units of Unfinished Doors to be painted
Banking
Derivative
# of Transaction records to be resolved at Security Exchange at EOD.
Hospitality
House Cleaning
# of Bedsheets that needs to be washed and dry cleaned
Food
Buffet
# of Plates left unused.
Entertainment
Cinema Hall
# of Unoccupied seats in a Cinema theatre for a film.
Transport
Airline/ Tour Bus/ Train
# of  Unoccupied seats on a route.
Medical
Doctor Prescription
# Excess tablets remaining once the patient has recovered well before the completion of the course
Real Estate
Construction of High end homes
# of Units unsold in a Project
Fashion
Home
# of Clothes Accumulated over a period of time leaving the Wardrobe bursting out and not used.
Home Furnishing
Furniture
Excess seating capacity like the # of Chairs in a House that is a waste of space and money.
Education
Class IV
# of Pencils /Story Books that a student possesses in excess to their requirement
 
The only way to Tackle this Waste, is to attach the demand of any resources to the Demand of the Customer/User OR to address your personal need. Easy availability of Resources and lesser time in procurement can help in Just in time procurement and usage of these resources.

Little's law describes that the average time a unit of work stays in the process is equal to the ratio of Work in Progress units of work to the rate at which the unit of work is delivered out of the system (in other words Throughput)
Flow Time = Work In Progress Inventory/ Throughput of work delivered.
 
Applications of Little's law is powerful in the below scenarios
 
1) To determine the number of counters to be made available during issuing of Boarding passes , so that the rate at which boarding passes issued are more, in order to reduce the Average Wait Time at each of the queues. By decreasing the Average wait time a passenger spends in a queue, the Airport can be relatively less crowded at the boarding pass issuing centre, security checks and gate areas, thus enabling to cater to the inflow of passengers arriving for different flights at different instances of time with an unpredictable inflow rate.
 
2) In an Application Support life cycle model, Little's law can be applied to influence reduction of Average Turn Around Time  per Ticket by either increasing the rate at which Tickets are solved per unit of time or reducing Backlog of Tickets (Inventory on Hand).  This when studied with other metrics like number of Application support resources used for increasing throughput can give us an insight on Productivity of the Application support Team. Increasing the number of people to reduce backlog is not a good practice, but reducing backlog with the same number of people is definitely a good sign.
The real life application is the enhanced Customer Experience to their queries/requests , lesser churn and increased engagement from the Application service provide
 
 3) The number of toll gates on a highway is another application of Little's law to prevent queuing at Toll gates and ensure smooth flow of traffic.
 
 Little's law is of prime significance to maintain balance between inflow and outflow rates and helps study whether we would desire to keep the Inventory within the process at different stages to an acceptable limit , minimum or maximum. Hence it is unavoidable in cases, where Wait time in the process can result in significant business loss, brand reputation and dissatisfaction.
 

Single piece flow means processing without any stoppage, waiting time and on demand/pull from the customer/user. In daily life , the 3 examples that I can think of - 
 
1) Adding extra smartbytes when your data(INTERNET) pack is over by buying few GBs or even KBs of data. Previously, we had to go to a shop to load currency to our cards in bulk, to use the internet/outgoing calls.
 
2) Internet Banking has enabled us to check our balance on demand (either mobile or laptop). Previously , we had to wait for the weekend to get our passbooks updated at one time (bulk processing), by going to bank and getting to know balance. (Some people prefer calling their bank manager even today to know the balance)
 
3) Viewing movies on demand in Netflix including original Netflix series , instead of waiting for it to be released in Theatres and view it in a group (batch processing).