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Is Storing Cold Inventory Costing You More Than Replacing It Would? 

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5S Organization

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As a Lean Consultant, one of the tools I use is the 5S Organization System which is particularly helpful when it comes to reclaiming space. In fact, storage issues are a big reason I am called into organizations. They need more floor space… they are moving into a new space… they realize they have dead inventory and don’t know what to do about it.  Often when I go into businesses, I discover they have become “blind” to the things they are storing that they don’t need. In some of these cases, this storage costs more than replacing the actual supplies being stored. 

This can happen when the parts become obsolete, or there is no process in place to handle these supplies, either in inventory, scraps, returns, or defect management. This happens a lot in Research and Development, in Engineering, and with business founders. In fact, business owner have a tendency to store personal items on property, creating a problem with space, but that’s a topic for another article. Today, we will address the 5S Organization System. 

5S Organization 

The 5S Organization System is part of Lean Methodology and consists of the components: 1. Sort, 2. Set in Order, 3. Shine, 4. Standardize, and 5. Sustain. Some companies choose to add a 6th S: Safety. Overall, this process helps organizations increase floor space, reduce costs, create a safer working environment, and increase productivity. 

Sort. This is the first step and its where we go through all the equipment, supplies, and tools in an area and sort based on who needs it, for what purpose, and frequency of use. We take into consideration the value of the items and the best location for them – which may include the dumpster, storage, donations, or even re-purposed in another area. 

Set in Order. After sorting and moving items out of a space, we then process the remaining assets. Logical arrangements are made to allow access to the right equipment, supplies and tools by the right people at the right times. Organizational systems such as bins, hooks, shelves or files may be used to reduce chaos. 

Overall processes may be examined to determine the best flow and to discover holes that would cause this problem to resurface. Care is taken to not create additional waste, which includes wasting time and resources. 

Shine. Shine refers to cleaning up the area. Often when items are stored for long periods of time, dust and debris can build up. But Shine isn’t just a one-time project. Shine puts systems in place for continuous organization and cleanliness of the area to prevent future equipment failure, inventory overstock or neglect. 

Standardize. Where Shine may feel janitorial or maintenance focused, Standardize addresses the root cause of the disorganization so it can be addressed proactively as much as possible. It creates processes, schedules, diagrams, task lists and more to create a culture and system of organization. 

Sustain. Sustain brings the organization into the future, keeping the changes in place. It keeps the fix from being a temporary solution. Anytime a new system or process is implemented, it will take time to get used to. After time, it can start to morph, so “checking in” with the process is a part of Sustain to make course corrections, or adapt the shifts for increasing efficiency. 

A Real World Example 

I was called into a company who was moving into a new space because they had too much “stuff” and needed help sorting so they knew where to move everything into the new space. We used the 5S Organization System for this project, as it was the best solution. While sorting, we came across three boxes that had the original tape from when they were shipped, 4 years prior. When I asked what they were, no one knew. So, we opened them. We looked into the boxes and I asked, “Do we need these?” 

The response I received was, “Well, I’m sure we do.” 

We asked around and discovered the boxes were holding supplies for a project that had been abandoned 3 years earlier. We kept going through boxes, determining what could be sold, donated, re-purposed or trashed. We ended up filling two dumpsters. Had they done the process prior to making the decision to move, they may not have needed to. 


PBEX, LLC provides a complete review and analysis of the business processes that create efficiency and profitability, and the barriers to them. Contact us today to learn more about lean business management and the multiple tools, including 5S Organization, and to schedule your review with a process improvement and automation expert.