Problem
In the study of Toyota's JIT system, many people concluded that inventory should be lowered to expose problems and, thus, force those problems to be fixed. A common analogy was that of a river with rocks. The water represents the inventory, and the rocks the problems. If you lower the water (inventory), you can find the rocks (problems). The idea that you should reduce inventory to find and fix problems became popular. Why can't this be a general rule that can be applied to all firms? And why is it sometimes best to do precisely the opposite of this policy (that is, raise inventory levels)?