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Inventory reduction - WIP reduction

On the chart above you can see the WIP reduction result for one of our mfg. lines. We have reduced 6x times within a few days and since that time we are keeping very low WIP. Do you want to know how we achieved? Read this section

Maybe there is not manufacturing company without WIP reduction activities or even WIP reduction projects. The reduction of work in process seems to be very popular tool for improving company overall performance in order to cut the manufacturing leadtimes, increase flexibility, reduce cost and improve quality. I know there are many articles related to WIP inventory reduction. But almost all are written by consultants :)
There are also well known tools to reduce inventory. The most popular are kanban and DBR by Goldratt.
I am running WIP reduction activity in our company and I would like to summarize my experience, trials and fails, and of course results, and to document the way how we achieved the WIP reduction to reduce WIP to with help of many colleagues from several departments.
I think it might be usefull for you to read about our way. Lets go through following rules.

Setting of the limit stabilized the material flow alomost immediatelly. What is received from warehouse is compensated by output of finish goods. And it is the true reason why to set up the WIP limit - to stabilize to material flow. If we imagine material flow as a river by setting Max WIP limit value we change stormy river to calm one. We will just avoid floods and dry seasons anyway the water level will be still high, like our WIP. We will discuss in the next steps how to reduce water level.

Some may ask: Which value to set as the first max. limit?
The actual one or the actual one plus x%. Or say actual one x 2, even actual one times 10 might be OK. It depends just on you and your experience.
I usually check a few days several times per day WIP value and then set up the limit to be something like average WIP level + some allowance to cover any fluctuation in the WIP inventory value. There is no complicated formula, no need. Common sense is enough.

If you are not sure which value to set, simply set up higher value. It is just the starting point, do not worry. Based on the results you can anytime change the limit :)