Inventory management has always been critical to profitability. But, in
today's economy, poor inventory management can put a company out of business
before anyone even recognizes a problem exists. Everyone is at risk — from
manufacturers of goods that normally make a stop in a warehouse, to companies
that buy supplies that go unused and tie up needed cash, to retail stores that
lose sales because of stock-outs.
New technologies provide options to
help solve this multi-dimensional equation. Many CEOs have been lured to the
supply chain management promised land. Vendors with the latest supply chain
techniques speak of phenomenal cost savings, efficiency and productivity
increases. These sales presentations have become the CEOs' new reality and they
expect to implement these improvements quickly in order to make the cost savings
hit the P&L as soon as possible. While supply chain gurus have promised to
improve productivity and dramatically reduce costs, these results are difficult
if not impossible to achieve without flawless execution over a substantial
period of time. Unfortunately, there is no magic formula.
The Inventory
Triangle
Companies destroy profits every day by having too much
inventory of the wrong stuff with high carrying costs, or by loosing customer
orders because of stock-outs. Profit enhancing inventory management is hard work
and requires numerous behavior changes. It is much easier said than done.
Effective inventory management occurs when three groups consistently
communicate, collaborate and execute.
|
|
