Intuitively, it's easy to understand that improved product quality reduces the need for inventory, particularly buffer inventory of extra components “just in case” something goes wrong. If you have fewer defective components, after all, you don't need to keep as much safety stock. And studies of Japanese manufacturing practices over the past 20 years have suggested that the relationship between quality and inventory can work the other way as well, although researchers have been somewhat vague on exactly how lower inventory can improve quality and by how much.A study published in the December 2000 issue of Management Science addresses some of these issues. For example, the authors explain that low levels of buffer inventory give workers key information on reliability and quality as well as where improvements may be needed. The study also found that the most dramatic benefits come when companies train and empower workers to find creative ways to improve process reliability on the basis of the information they gain from just-intime (JIT) inventory initiatives.T
