S1E01 Why Inventory is bad

Software Development/Manufacturing (and Factorio) = Inventory is bad 

Wikipedia:

"the goods and materials that a business holds for the ultimate goals to have a purpose of resale"

My generalisation:

"Finished Products or Components not generating value"

Either developed features or stages of development not yet in the hands of consumers

Waterfall:

Requirement → Design → Build → Test → Release

Agile:

Grooming → Sprint → Release

Shorter release cycles decrease the inventory of a software development team

Asset

In terms of financial reporting inventory is listed as an Asset on the Balance Sheet
because it represents a value

Open

Liability

• Will you be able to resell at full value?

• Cost of maintaining inventory?

• Relevance of product over time?

• Customer feedback?

Value

Value is generated when a consumer is using the product

Physical:

Christmas decorations → Demand in December. Production all year

Difference between graphs is Inventory

Software:

Annual release → Demand all year, but only released annually → Extra releases...

Inventory evens production → Inventory hides the cause of variation

1. Delay value generation

2. Hiding the cause of the variation → Fix it instead of 

3. Delay feedback and extends feedback loop

The Toyota Way by Jeffrey Liker

Try Audible.com with 1 Month Free Trial

All material available in Confluence:

More "10-min Product Management" Videos on YouTube

Join the discussion on the Discord server:

Support the channel by becoming a Patron: