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Inventory Management

# 11 Establish frequent, small lot deliveries

As Lean manufacturing and process management are proving their efficiency, JIT – just in time and small lot deliveries are an established pull method that requires small work-in-progress and final product inventory while providing flexibility and quick response to changing needs.

In addition purchasing in small lot sizes may increase the product’s quality, improve the traceability (as it makes it easier to count and prevent from potential shortages) and lead time but usually results in more traffic and increased transportation costs.  

Therefore the calculation of the economic order quantity for your product type that gives the most optimal lot size for a given demand period with minimized setup and holding costs, would be the best solution for your operations and customers.

Zvezda Drencheva

 

Source: BMS Associates - Ben Schlussel, 2017

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