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.
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