Unoptimized Storage Space: The “Cholesterol” of the Production Line

Unoptimized storage space is the cholesterol of the production line — it obstructs a continuous, uninterrupted production flow and prevents the company from achieving its 5S operational goals and strategic financial targets.

From a managerial perspective, the production area is generally the highest-value space within a company, as it hosts all the transformational processes that convert raw materials into semi-finished and finished products. The high value of the production area is justified by the need to accommodate all equipment necessary for production (production lines), ensure all utilities required for the process (electricity, compressed air, etc.), provide suitable production conditions (e.g., ESD flooring, air overpressure, cleanliness levels, filtration), and, not least, facilitate the flow of raw materials and personnel to support production operations.

Pragmatically, given the high cost per square meter of production space, it must be used with maximum efficiency. Therefore, using production space for storage purposes is among the least justifiable expenses.

Any storage area created within the production zone must contribute to and directly support the value of the production process. While most companies avoid storing unused equipment or idle lines in the production area, many fail to properly optimize the storage zones adjacent to the production line that house raw materials required for ongoing operations.

We distinguish two major models for supplying raw materials to the line, each with different space requirements and unique constraints and opportunities for managing and optimizing the production area:

Push Model

A widely used approach is the kitting model, ideal for low-volume, high-mix production. In terms of storage space, kitting requires a large footprint and frequent material handling—especially when materials are returned to the warehouse and re-enter inventory.

Optimizing storage space under this model can be achieved by integrating the material return process more efficiently within the warehouse.

However, for companies operating with a push model, it’s desirable to gradually prepare production and supply processes for a shift towards a pull model, when such a shift is economically justified.

Pull Model

Used mainly in high-volume, low-variability production, the KANBAN model allows for Just-In-Time (JIT) delivery, where materials arrive at the production line precisely when needed, minimizing in-line inventory.

To optimize production space within this model, ideally, production lines and storage should be lean integrated—for example, through cardboard engineering solutions.

While it marks a step forward in streamlining in-line raw material storage, classic KANBAN, Double Bin, and Electronic Min-Max systems still require some level of in-line raw material inventory.

For classic KANBAN, minimizing in-line storage means periodically recalibrating cards based on production volume.
For Electronic Min-Max, it involves lowering the minimum stock threshold, which can be done by increasing the backflush frequency and improving stock accuracy—especially by reporting losses or non-conforming products as close to real-time as possible.

Although possible, maintaining these processes over the medium to long term can be difficult.

Unlike these systems, JIDOKA KANBAN provides the most effective integration with the JIT model. It requires no ongoing maintenance after implementation and reduces inventory on the line to the minimum necessary.

Semi-Finished Product Storage

Just like raw material storage, every production area contains zones for storing semi-finished goods. Here, too, we observe two models through which these intermediate stocks are generated on the line:

Push Model

In this model, the planning department synchronizes production stages, scheduling stock levels of semi-finished goods between phases.
The risk here is that stages become desynchronized, leading to overstock of one item and shortages of another.

Pull Model

In this model, downstream production stages “pull” semi-finished products from upstream, triggering a replenishment process.

This KANBAN process is difficult to implement and, if done poorly, can negatively affect operations by increasing changeovers in the upstream process and reducing its efficiency.

Why the Model Matters

The model used for producing semi-finished goods directly impacts how raw materials are supplied to the line. That’s why it’s critical to balance processes and select the right push or pull methodology through lean techniques like Value Stream Mapping or SMED, always tailored to the actual constraints and dynamics of the production space.

Ideally, a perfectly optimized and integrated production flow would have a KANBAN system that generates signals not only for raw materials but also for semi-finished products.

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