It was a hot summer day at the cheese factory with hundreds of mice scurry around the factory floor. The cheese process was complicated and followed the same process that its founders had created almost 100 years ago. Mr. Cheese took a trip out to the production floor and walked through the 25 steps the cheese must follow before it could be shipped to mice across the country. Seeing lots of cheese on the floor Mr. Cheese patted himself on the back seeing how hard everyone was busy scurrying around making cheese. Then Mr. Pink Tail, the accountant, approached Mr. Cheese with some bad news. “Did you know that last week we shipped 500 cheese circles, but we have over 1,250 cheese circles in work in progress [WIP] out on the factory floor? That’s a lot of cheese and if we keep it too long on the floor it’s going to start stinking and molding. We need to make cheese not store it!” shouted Mr. Pink Tail. Mr. Cheese’s whiskers started twitching as he wasn’t really sure where to start. “Out to the floor to find some cheese!” exclaimed Mr. Cheese.
Mr. Cheese went to the cheese mixing room and soon discovered that each day they were preparing enough cheese mixture to cover three days of shipments. Mr. Cheese turned to Mrs. Busy Mouse, the mixing supervisor and asked “Why are you making more cheese each day than we can ship?” Mrs. Busy Mouse announced “We must make more cheese than we need because we don’t want to shut down the factory if the cheese mixer goes out again!” “That would be bad” said Mr. Cheese. “How often does the mixer go out?” Mrs. Busy Mouse exclaimed, “It’s going to happen soon because that’s what they told me when I was hired 10 years ago!” Mr. Cheese went back and checked the maintenance log and discovered that it was 12 years ago that the mixer motor broke shutting down the factory for almost a week. Mr. Cheese thought to himself “Why did we not just get an extra mixer motor to have ready if this happens again. Rather than fixing the root cause we just made more cheese and increased the work in process inventory levels.”
Mr. Cheese was furious as he followed the production process and soon discovered that almost every department was keeping extra cheese available just in case something unexpected happened. “This stinks”, shouted Mr. Cheese, “Rather than solving problems our mice are just storing more cheese to make sure they never run out!”
That same day Mr. Cheese established minimum and maximum amounts of cheese that each department could hold at any time. The cheese work in process fell by 50% and Mr. Pink Tail rested well that night knowing that the risk of stinky moldy cheese was gone forever!