Minimising Inventory Waste in Food Manufacturing with Lean and Kanban

In manufacturing, inventory is often seen as a necessary evil.

But in reality, it’s one of the seven lean wastes, and the symptom of overproduction—the worst waste of all.

When you stockpile goods, you’re not just tying up capital—you’re masking inefficiencies and creating barriers to a smooth production flow. For perishable food goods, this problem becomes exaggerated and applying lean ways to reduce stock becomes even more important wit excess inventory quickly becoming a ticking time bomb.

For this precise reason, many food and beverage manufacturers are turning to lean practices and Kanban systems to eliminate inventory waste, uncover hidden issues, and improve responsiveness.

In our work with five UK-based food and beverage manufacturers, the FlowPlus team is helping companies minimise excess stock, streamline production, and enhance product freshness, all through a lean, just-in-time (JIT) approach.

The Problem with Excess Inventory

In lean manufacturing, inventory shouldn't be seen as an asset—it’s an obstacle.

Excess stock hides inefficiencies, drives up holding costs, and hides production issues, like machine downtime or quality issues to go unnoticed. By reducing inventory, these issues quickly become visible, forcing the organisation to tackle them head-on.

Its easy to think of reducing waste as being simply reducing food waste and spoilage. The reality - this only typically accounts for 5-10% of the cost savings associated with working in a leaner way and reducing inventory. The main benefits come from improving product quality (fresher product tastes better), reduced stock holding costs (incl warehousing, storage and transport, management costs) and improved flexibility to produce to match customer demands.

Reducing inventory to only what’s needed when it’s needed reveals inefficiencies in areas like scheduling, equipment maintenance, and quality control. Each time a company reduces its stock, it’s forced to improve its processes, resolve bottlenecks, and ultimately run leaner and more efficiently.

How Kanban and JIT Tackle Inventory Waste

Kanban is a visual production control system that only signals production based on real customer demand. It prevents overproduction, eliminates excess stock, and aligns production schedules with actual needs. Here’s why Kanban is essential for food manufacturers looking to go lean:

• Controlled Production: Kanban helps teams avoid overproduction by creating a pull-based system where production is only triggered by real-time demand.
• Instant Visibility: Kanban enables real-time monitoring of stock levels, highlighting potential shortages or delays before they become critical.
• Rapid Response to Changes in Demand: In the food sector, demand fluctuates constantly. A Kanban system allows manufacturers to scale production up or down, staying agile without holding “just in case” inventory.

Implementing a JIT system in food manufacturing also encourages continuous flow by reducing batch sizes and inventory levels, improving responsiveness, and maintaining product freshness.

The Benefits of Kanban for Perishable Goods

1. Reduced Spoilage and Waste

In a lean, Kanban-driven system, stock turnover is faster, which reduces the risk of spoilage. With fewer products sitting around, manufacturers have less waste and better control over inventory, ensuring they only produce what can be used.

2. Lower Holding Costs

Excess inventory needs storage space, energy for refrigeration, and frequent management. A JIT system reduces these costs by minimising storage requirements, cutting down on overheads while maintaining efficient stock levels.

3. Fresher Products for Customers

With a rapid production cycle tied directly to customer demand, customers consistently receive fresher products, improving customer satisfaction and increasing brand loyalty.

4. Flexibility to Meet Changing Demand

Kanban enables quick responses to shifts in customer demand without the buffer of excess stock. If a large order comes in, production can increase as needed, and if demand falls, production slows accordingly. This flexibility helps companies adapt quickly, maintain service levels, and minimise waste.

Making Problems Visible with Lean Inventory Practices

Excess inventory doesn’t just take up space; it conceals inefficiencies. Reducing inventory forces problems to the surface, making it clear where improvements are needed. Here’s what happens when inventory is reduced and Kanban is implemented:

• Exposing Downtime and Inefficiencies: When stock levels are low, even short downtime on a machine becomes visible, enabling teams to quickly address and reduce idle time.
• Right-Sizing Batch Sizes: Kanban eliminates batch-based production, aligning production with actual demand and reducing unnecessary runs. As inventory drops, batch sizes naturally shrink to meet demand levels.
• Improving Quality at Each Step: Lower inventory levels help companies focus on quality, as issues can no longer hide behind buffer stock. Focusing on quality throughout the production process prevents defects from reaching customers and reduces the need for costly rework.

Success Stories from FlowPlus: Lean Inventory in Action

FlowPlus is working with five food and beverage manufacturers in the UK to implement Kanban and lean inventory principles. Through focused workshops that integrate production planning, scheduling, and stock control, we’re helping these companies reduce inventory waste, enhance production flow, and improve product freshness. Here are a few results they’ve achieved so far:

• Reduced Spoilage by 20%: By limiting the stock they keep on hand, our clients have significantly cut down on spoilage costs while maintaining the same level of output.
• Lower Holding Costs: Minimising inventory means less storage space is needed, which translates to lower utility and maintenance costs.
• Improved Responsiveness to Demand: These companies can now quickly scale production to match changing customer needs, meeting demand without holding unnecessary stock.

Are You Ready to Eliminate Inventory Waste?

In food manufacturing, inventory waste is more than just a line item—it’s a drain on profitability and a barrier to efficiency. Kanban and JIT inventory management are transformative tools that allow food manufacturers to keep products fresh, cut costs, and bring hidden problems to light.

The FlowPlus team is here to help. Through tailored workshops and hands-on guidance, we help food and beverage manufacturers transition to lean, efficient systems that expose inefficiencies and drive continuous improvement. With less stock in the way, you’ll uncover a production flow that’s fresher, faster, and more profitable.