S1E01 Why Inventory is bad



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

What is inventory



"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"

Inventory in software development


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


Requirement → Design → Build → Test → Release


Grooming → Sprint → Release

Shorter release cycles decrease the inventory of a software development team

Inventory as Asset or liability



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


  • Will you be able to resell at full value?
  • Cost of maintaining inventory?
  • Relevance of product over time?
  • Customer feedback?


Value is generated when a consumer is using the product




Christmas decorations → Demand in December. Production all year

Difference between graphs is Inventory


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

Smoothen production


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

Reading recommendation


The Toyota Way by Jeffrey Liker

The Toyota Way cover art

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All material available in Confluence:

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