Suppose you’re struggling to rally the organization toward world-class inventory performance. Want to wean your organization from its inventory addiction and learn how to build a sustainable profit center with increased inventory velocity. You will need to tackle the myths about inventory, understand and accept the facts, and shift paradigms as follows:
These myths keep organizations from achieving greater financial success.
Fixed inventory levels. Enterprises make the mistake of believing that inventory levels are fixed and that the current level is essential to support their customers.
Inventory is an appreciating asset. A common misconception is to think of inventory as an investment similar to capital equipment or factories.
Low inventory equals poor service.
Excellent service equals fast delivery. Suppliers and manufacturing can’t be fast today and late tomorrow.
Many stocked locations equal excellent service.
Get the facts about inventory.
Minimal inventory system designs are more responsive to customer needs.
Reliable and predictable customer delivery dates and times are more valued than the speed of delivery.
Inventory hides sub-standard internal operations performance.
Inventory conceals both poor supplier delivery and quality performance.
Shift your belief system on inventory and shatter any misguided paradigms.
Incremental inventory carrying cost assumptions create poor long-term business results.
Inventory velocity improvements are not just a supply chain management responsibility. Inventory velocity improvements need to be part of the enterprise’s DNA.
Applying the above building blocks to your process will allow you to shift your organization's belief system on inventory and transform problem chains into highly competitive profit chains.
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