Inventory is one of the most valuable assets a company has, yet benchmark results show
that most companies fail to manage it effectively. The majority of manufacturers and distributors
rely on out-of-date, too simplistic, or overly localized inventory policies. By
doing so, companies tie up working capital, harm customer retention, and hurt shareholder
value-added. Faced with lengthening supply channels and tighter service-level
demands from customers, many companies are now wholesale reexamining how to flow
inventory across their supply chains and how to set inventory policies. In general, companies
are finding they have been burdened with inventory misconceptions (including
around Lean principles), oversimplification, corporate discomfort with changing inventory
strategies, and significant underinvestment in breakthrough collaboration and optimization
technology.