Inventory Optimization

Dan Gilmore at The SupplyChainDigest reported on a study that showed the importance of good inventory control:

“…permanently reducing your level of inventories relative to sales and sales growth can have a dramatic impact on a company’s share price.”

Inventory is a very visible way to measure a firm’s supply chain efficiency.  However, inventory is a great way to control for variability in the supply chain.  So, if you want to permanently reduce inventory, you need to go after the underlying variability.