Sales people think of inventory as an overflowing basket of goodies. There should always be extra, just in case.
Operations people think of inventory as carefully organized shelves with the minimum needed for 95% of orders.
Accountants think of inventory as cash.
At a symposium I attended on Emerging Chain Supply Trends held by APICS- Inland Empire Chapter, one of the Panelists, C.J Nord said “Supply chain begins at customer demand and ends at customer satisfaction.”
“Think about inventory as a strategic weapon”, said Panelist Brian Reed from Niagara Water
The strategic questions you should ask about inventory are:
- Where should it be located?
- How do you use it to create better customer service?
- Should you as a vendor manage the inventory at your customers’ locations?
- Should your customer service folks be part of supply chain rather than reporting to sales?
This is a very different way to look at inventory.
What would you have to change to think about your inventory and your supply chain management as a strategic weapon?
Illustration courtesy of http://www.303sales.com