Inventory reduction is an outcome.

It seems almost all improvement programs I see have as a central objective the reduction of inventories. That is pretty easy to achieve, order less, less often, and in smaller quantities, objective achieved.

However, when you count customer service, and cycle times into the equation, something the financial inventory measures do not do, reduction of inventory can have a catastrophic impact on financial results, as if nothing else changes, you just fail your customers.

Reduction of inventory is usually an outcome of the reduction of waste, but should not be the objective, waste reduction, waste in all its forms, should be the objective.

About strategyaudit

StrategyAudit is a boutique strategy and marketing consultancy concentrating on the challenges of the medium sized manufacturing businesses that make up the backbone of our economy. The particular focus is on their strategic and marketing development. as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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