What does the term 'excess inventory' signify in lean manufacturing?

Excess inventory in lean manufacturing refers to resources that are not actively used in production. This concept aligns with the principles of lean manufacturing, which seeks to eliminate waste in all forms to enhance efficiency and productivity. Excess inventory is considered a waste because it ties up capital, consumes storage space, and can lead to increased carrying costs such as insurance and spoilage. The goal of lean practices is to maintain just-in-time inventory levels, ensuring that materials and products are available only as they are needed in the production process.

In lean manufacturing, minimizing excess inventory is critical to improving flow, reducing lead times, and ultimately enhancing customer satisfaction. Understanding and managing inventory levels effectively allows organizations to respond better to changes in demand and reduces the risk of holding obsolete materials.