Inventory/Material Variances

Six Sigma – iSixSigma Forums Old Forums General Inventory/Material Variances

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    Has anyone conducted a Six Sigma project, or know of a Six Sigma project in the area of inventory/material variances?



    a project has been done to reduce/fix the inventory level of spare parts whose consumption pattern can b epredicted.
    Inventory is a function of VARIATION in Lead time and Consumption which depends on life. A detail analysis could bve done to find the components of lead time and ways and means could be found to reduce it and also to reduce the VARIATION in Lead time. Similarly the life achieved could be optimised and inventory could be planned accordingly.


    Tom Black

    Inventory variances are a problem just like other problems that can be solved by the Six Sigma methodology.  I mentored a BB in one of our manufacturing plants that did just that.
    She started with the basic tools of process map and XY matrix.  Did gage R&R on the measurement devices for the liquid dispensing system.  Eventually, tracked the whole thing down to a combination of wrong specs by engineering (add too little) and wrong amounts added by the plant (that’s not enough, let’s add some more).  Inventory was being relieved at the spec rate, not at the add rate.
    Turns out the plant was overfilling.  Corrected the spec, corrected the add amount.  Solved the variance and saved $50K on the overfill.
    Tom Black, MBB

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