ffective inventory management is at the core of supply chain management excellence. in-process, partner inventories and more, truly sits at the intersection of demand and supply.
Yet our understanding of inventory management practices in many respects still has a long way to go. In fact, it is really only in the last decade or so that the direct link between inventory management
Consultant Gerry Marsh, who works with some of the world’s largest companies, has than competitors will usually have higher stock price multiples even if earnings per share and growth rates are similar between the companies.
Yet, leading up to the recession, inventory levels in most industries had chains, SKU proliferation and other factors that have been putting upward pressure on inventory levels actually meant companies were making solid progress on the basics.
That may very well be true, but in the end leaves companies with little to show in terms of bottom line improvement.
Most companies did cut inventories sharply in the deep recession year of
2009, but primarily through “slash and burn” type approaches, sometimes with the goal of corporate survival, using techniques that may not be sustainable as the economy continues to recover.
Supply Chain Executive Brief ings with as the
“...it is only in the last decade... that the direct link between inventory management effectiveness and corporate well understood, (and) has level interest.”Chief Supply Chain Officer Insights June 2011 CSCOinsights The knowledge source for Supply Chain and Logistics executives
2
Five Strategies for Improving Inventory Management...
Now, coming out of the recession, companies are again facing a number of issues that are adding to their supply chain network complexity, which serve as headwinds to inventory reduction. Today, many if not most supply chains