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10 golden rules of Inventory Management

  • By faber
  • August 9, 2018

Inventory plays a crucial role in complying with the demands and in creating value for the manufacturer as well as for the customer. Moreover, inventory is also one of the wastes that impacts the business and minimizes the profits and profitability of the organization. Hence, it becomes important for any business to maintain enough inventory for the demands. In precise terms, inventory management is the collected activities of employees maintaining optimum number of required items available to comply with the demands at optimum costs in the market.

Inventory Management

Inventory management is about understanding the situations like supplier conditions, product requirement, and lead times and then managing inventory to control the overall cost.

Balancing various inventory management task means keeping an eye on three basic aspects.

  • Lead time
  • Supplier Conditions
  • Demand variations

Before we move ahead, let us have a look at the various types of inventory involved in the manufacturing process.

Types of inventory

  • Raw material
  • Work in progress
  • Finished goods
  • Spares/Consumables

The 10 golden rules of inventory management

Any inventory needs to be efficiently managed for the demands. Below is a set of rules that can help an organization in optimizing their inventory for achieving optimum results.

  • Air free –

The inventory should be managed in an organized way using vertical storage and keeping it air and dust free. This can be done using lean tools like Five S.

  • FIFO –

FIFO (first in, first out) is a very interesting concept that enables the organizations to be in loop and avoid the risks involved in inventory management to a certain extent. In simple terms, it is an asset management and valuation system which helps the manufacturer in selling out the commodities manufactured first at the earliest. This can be done with lean tools like Five S and the manufacturer has to take care to keep replenishment and removal on different sides.

  • Bend free –

What we mean here by bend free is to keep the employees as far away as possible from bending to either pick or transport materials and products, since bending a lot might result in injuries which will ultimately affect the working and productivity.

  • Count free –

Poorly arranged inventory and spares inside the warehouse is bound to result in messy storage and pathetic accountability. This will further result in wastage of time and incur extra work. Hence, inventory should be neatly arranged and should be made visible and count free. Again Five S is the solution to this.

  • Search free –

Materials and products in an inventory warehouse should not be kept together. There should be proper segmentation for every different type of tools or materials to have an organized inventory. This will help one in avoiding the time incurring in searching and retrieving the desired material. Systematic arrangement of the tools and equipment with a structured index will help to save time and improve productivity.

  • Heavy material on ground –

Heavy materials should be kept on ground since keeping it at height will make it difficult to access them and might result in accidents and mishaps. Hence, as a precautionary safety measure, heavy materials should be kept on ground. It will also lead to easy access and less damage to inventory.

  • Fast consumables near the entrance –

Materials should be arranged in the inventories as per the rate of their consumption. If items that are consumed at a rapid pace are kept at the far end of the warehouse, it will incur more motion and time to access them and transport them to the desired place.

  • Climb free –

Spares should always be kept at places where they are easily accessible. Keeping them above normal heights will consequently make them more difficult and riskier to handle. It becomes more convenient for an individual to access them if they are kept at lower levels.

  • Adequate lighting –

Lighting plays a very crucial role in helping the inventory management in identifying the defects and abnormalities occurring inside the inventory warehouse. Adequate lighting makes it very easy to identify such defects hampering the efficient

  • Adequate ventilation –

Adequate ventilation should be provided in the warehouses to keep healthy working atmosphere. Lack of ventilation makes it uneasy and difficult for an individual to work efficiently.


Inventory is no doubt the backbone of any manufacturing industry. Hence, it becomes quintessentially important for any organization to be alert on their inventory side. Team Faber Infinite has helped dozens of clients in improving their inventory and ultimately achieving excellence and continual and sustainable development. The objective is to efficiently and effectively provide the right materials at the time when it is required and with right quality standard maintained. For more information, contact us at [email protected]