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Unnecessary Inventory: Muda matters in IT

by Mark P. McDonald  |  October 11, 2009  |  2 Comments

There are seven sources of waste identified in lean thinking.  Unnecessary Inventory is one of them and found in any company.  There are many forms of inventory:  finished goods sitting in a warehouse unsold, work in progress tied up in your process, and raw materials awaiting production.  In manufacturing a major concern of unnecessary inventory is work-in-progress (WIP) which cannot be readily sold either to customers or to other companies.

On first thought it might be easy to say that there is no inventory in IT so this form of waste does not matter.  Think again. IT has inventory in terms of hardware capacity, hardware provisioning, service requests and most importantly its investment portfolio.  The critical issue is that this ‘inventory’ in IT is mostly work in progress.

Work in progress carries with it special costs and risks as it consumes capacity and resources and will require additional resources to bring the work to completion.  The greater the proportion of WIP, the greater your level of risk that the work you are doing will lose its business relevance.

Reducing unnecessary inventory requires raising IT productivity and reduce service and development cycle times.  When IT starts something it remains work in progress until the work is completed.  Address the waste created by unnecessary inventory by:

  • Shortening your development cycle time by doing fewer projects faster.  Every project/initiative in process is work in process and the longer these projects take the greater the chance they will lose their business relevance.
  • Concentrating on a few projects at a time, rather than pursuing multiple initiatives in order to ‘fully load’ your resources.  Concentrating resources helps reduce cycle time raise quality and reduces total work in progress.
  • Virtualization and consolidation reduces WIP and excess capacity regarding unnecessary inventory in the infrastructure.
  • Coming clean on service and change requests by eliminating those requests that are accepted but that you do not expect to act on any time soon.  Each of these requests takes up time, erodes business trust and the longer they stay WIP the worse it gets.
  • Fill open and approved IT jobs and positions.  An open headcount or one with the wrong skills slows down your cycle time, reduces your quality and creates more work in progress.

In IT the resources tied up working on multiple projects without completing them creates work in process.  Remember that five active projects means five investments and no results.  Manage IT for throughput to accelerate your cycle time, create greater results and reduce unnecessary inventory.

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Category: economy  leadership  lean-thinking  

Tags: business-leadership  cost-cutting  it-leadership  it-management  lean-thinking  

Mark McDonald, Ph.D., is a Vice President and Fellow Emeritus in Gartner for General Managers Program.

Thoughts on Unnecessary Inventory: Muda matters in IT

  1. […] Unnecessary Inventory – in manufacturing the concern is Work-In-Progress (WIP).  In IT the resources tied up […]

  2. […] This post was mentioned on Twitter by Jörgen Dahlberg. Jörgen Dahlberg said: A great example of not being able to step out of the box #ea #ba #itil #itsm #gartner. […]

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