Finally an Inventory Solution for Wholesalers, Dealers and Large Retailers

For ages, the resellers like wholesalers, dealers and retailers had to forecast, plan and store their own inventory where all of the risk is theirs only and the rise and fall of demand kept on impacting their on time delivery, their return on investment, stock-outs and so on. Never ever they had a collaborative solution which can provide them access to a preferred group of resellers inventory and they can collaborate to re-distribute, re-allocate and replenish inventory based on the groups requirement.

Few days back, I witnessed an inventory management solution which could help the resellers do all this and not only this but the solution offered lot of other benefits. I prefer to call this solution as Shared Inventory Pool Solution (SIPS). This solution ensures that you can afford to keep lesser inventory and at the same time the participants of the group can plan together which slow moving items should be kept jointly or can allocate these items storage to different participants so that at least others can release their capital to that part and use it elsewhere. The benefits of SIPS are:

• It allows aftermarket manufacturers, dealers, wholesalers, retailers etc. to indicate which parts of the inventory can be shared with the participant group members and which part of the inventory can be visible to them. This helps you control your inventory privacy as well as let others know if you have something that they need and you have extra numbers, then those can be borrowed and sold
• Provides real time access to shared inventory pool whenever a customer orders which helps in giving accurate available to promise (ATP) date to them
• Provides ability to split an order across multiple participants in case the participant is not ready to part with its critical inventory and in this case, the customer will still get a unified quote and no participant will lose sales for want of stock
• KPIs like obsolescence, scrap, shelf life, on-time delivery, perfect orders fulfillment get improved
• Best in class inventory codification, catalog management and categorization
• Provides ability to integrate with multiple ERP systems and extract allowed visible items data to be shown in a single screen to all the participants

Since SIPS can also be a cloud based solution, it is an innovative and practical application in supply chain space. I am not sure if this solution is available for businesses other than resellers for now in the market but it is just the matter of time if it is accepted in the reseller market and is able to show its value.

SCM Strategy: Do not lose sales due to inventory issues

I have written earlier about inventory optimization and its key drivers and thanks to my readers, the article made it to the best inventory optimization articles and was appreciated by Chief Supply Chain Officers across the globe. It also triggered a debate on how should we first identify the exact causes of lost sales due to inventory related issues and deploy pertinent solutions. Normally, lost sales due to inventory drives the business teams to push for increase in inventory levels and if the supply chain team resists, the sales team will start adding buffers to the safety stocks of at least the best selling items and hence the inventory levels will rise automatically over time. These measures  however, are less scientific and panic driven which increase the working capital and inventory carrying costs. It also reduces the inventory turns and leads the best in class organization towards the laggards position, though the service levels might increase.

This whole situation compelled me to take the article to the next level and come out with the possible reasons, causes, solutions and enablers on the subject of losing sales due to inventory issues. I could create a small framework that talks mainly just about the key reasons etc. and do not cover everything related to it. Infact, this framework (which is given below) is industry agnostic and can be the starting point of inventory optimization for most organizations. It also incorporates the best practices that major supply chain leader companies (like Apple's iPAD SCM policy) deploy and is worth a look and evaluation.

In case the above picture is not visible or you need further details on how to use the framework to identify the reasons, causes, solutions and enablers for your own organizations, please contact me through the contact form. I share the knowledge completely free of cost.

Free up your working capital by increasing global inventory visibility

I do not have to sell the idea of reducting your working capital as there is not even a single organization that does not want to freeup its working capital so that it can be invested in expanding, modernizing or improving its operations in many ways. I want to share one of the effective ways of not only reducing the working capital but also to improve some other critical business metrics. 

In case, an organization has multiple warehouses (and in multiple continents) due to reasons like faster delivery to customer, savings in shipping costs or low cost local sourcing of components/products then it makes good sense to improve on its capabilities in having visibility of inventory while booking a sales order from a customer. It means, that if an organization has the ability to see in real time, which all of its warehouses has the item available required by the customer then it makes easier to make decision on which warehouse should be used to ship the material so that following metrics can be improved:

• Reduction in  slow moving inventory - If a warehouse holds large stock of slow moving items and a "closer to customer" warehouse also have that item but in bare minimum quanttities, even then, one might want to select the warehouse which is far but provides the opportunity to reduce that slow moving item in bigger numbers
• Reduction in item obsolescence - Some items have shelf life and having visibility on their stock in different warehouses provides us the opportunity to ship the soon expiring items first
• Higher ontime delivery - Again, if a nearer (and default) warehouse for a customer, does not have the item and will have to procure it to ship to the customer, then visibility of stock in other warehouses provides the opportunity to check out if the item is available elsewhere and can be shipped to the customer cost effectively without compromising on on time delivery
• Higher Customer Satisfaction - This business metric will get a boost from the above metric (high ontime delivery) and we are sure to see much improved confidence in our organization when their orders are reaching on time more frequently
• Higher Inventory Turns - The most obvious and effective benefit of global inventory visibility is its capability to improve the overall inventory turns by provding us the opportunity to optimize stock at all warehouses and hence improving annual inventory turns which results in freeing up of working capital

So, keep an eye on a solution in your Supply Chain that provides you the capability to improve your real time visibility to global warehouses so that you can reap the benefits that it brings.

Strategy: Catalysts to achieve your Lean Objectives

Few weeks back, I wrote an article on the role of demand planning, forecasting and inventory optimization in achieving Lean Manufacturing. This article evoked a great response among readers and since the comments on this blog were not working for some time in between, I got maximum comments in my mail box or in the discussion I posted on one of the social media sites.

The responses were largely questions and expert opinions and I thought to share some of them here with the readers as these are highly rich in content and will be helpful for all of us to think about our strategies to achieve lean manufacturing with or without the help of planning.

Largely, there were two schools of thought on whether planning (forecasting and demand planning) helps in achieving lean manufacturing to an extent that the investments made in these areas are justified and are able to provide the returns accordingly. Thoughts were divided and one group was sure to say that forecasting is just a guess and will remain a guess so it is sheer time wastage to improve your guesses and hope that these will help you in your lean objectives whereas the other group was as sure as the first one on the fact that forecasting can surely help in achieving lean objectives as it reduces inventory and improves the service levels, which makes easier for the manufacturing operations to stick to a single product line for optimum period so that the manufacturing line efficiency improves.

To quote some of the responses, Wally Johnson (VP Supply Chain/Operations at EPIC Technologies LLC) said, “A forecast is nothing more than an educated guess. The better your guess, the closer you get to maximizing you revenue and minimizing the waste in either lost sales or excess inventory. As you reduce your lead times and your ability to respond, the forecast becomes less important. At the limit, planning is reduced to communicating needs to suppliers and aggregating immediate needs from customers. So, no planning doesn't help you get lean, but the less lean you are, the more you need it”. Another comment from Michael Pitcher (President, Operations Excellence LLC) is - “Forecasting can be used, at least initially, to size buffers and marketplaces. This is especially true for new products, cyclical/seasonal products, or short life-cycle products. Once buffers are established, actual pull must be used to recalculate and resize buffers and marketplaces. So, there can be value to demand planning and forecasting. On the other hand, it can be a huge waste of time and energy when over emphasized.”

We had quite an opposite viewpoint from Connie Wendzicki (COO at Griffin Technology), who says – “The demand planning is what you do to calculate the correct inventory levels when you implement the lean system. These inventory levels have to be revised frequently as the demand and supply patterns change. Even Toyota had an extensive planning department to accomplish this function. If you set-up lean without figuring out the right inventory levels you can be in for a few big surprises! On the other hand - analysis paraysis is not good either. Better to put the system in place with the best inventory levels you have vs. wait forever until you figure out what the "perfect" inventory levels and reorder points should be. There is some tolerance for error. You will at least see where the problems are (where inventory is piling up or where lines are starved for inventory) if you implement the system and you can tweak it then”. Connie is helped by the comment from Ron Golan (Director at XML Limited) who mentioned that, “…my experience taught me to believe in continuously trying to optimize demand planning and forecasting - you may not hit bulls-eye, but the closer you get, the more efficient you are in minimizing lost sales and excess inventory. And the build-to-order approach - that might work for Dell, but is completely unpractical for so many other companies. Plus, in many cases you'll just be passing the issue to your suppliers, and remember some of us may be on the receiving end of this”.

Carlos Moreno (Senior Logistics and Supply Chain Analyst with Medtronic) mentioned a third approach with his comment – “Lean is a tool for continuous improvement is a cycle that never ends. It may be applied to improve lead times, supplier performance, operations and supply chain processes just to give some examples. Forecast and demand planning are useful as strategic and long-term planning tools and also subject for continuous improvement. Since forecast and demand planning are estimated guesses based on crystal ball projections (marketing and sales forecast), I would see them as variables out of the control of the supply chain management processes for inventory control and customer order fulfillment”.

These were few of the responses and comments and the one thing that came out clearly and I replied to them in most of my replies is that alone forecasting or demand planning is not enough and the another part of our strategy here needs to include reduction in lead times so that the dependence of operations on accuracy of forecast reduces. Basically, if the supply chain responsiveness is fast (in other words lead times are low) then the organizations have more capability of responding faster to the changing demands and hence they can achieve leaner manufacturing processes as well as lower inventories with improved service levels.

I liked the idea of freeing up of operations with their dependence on forecast accuracy and as put up by Swaminathan Appu Iyer (DGM – Distribution & Logistics at Reliance Retail Limited), “The manufacturer whose efforts to effectively forecast and plan demand are being undermined by an increasingly complex business environment. Manufacturers large and small are struggling with the fact that demand forecasting and planning, never a simple process, are today being made much more difficult by trends such as globalization, shortened product lifecycles, and customer demand for more product variety. In fact, many manufacturers are finding that, despite what they thought were their best efforts, forecasting error rates are actually rising”. This shows that planning is something that most organizations are still struggling with.

All these comments and inputs lead me to think about a joint strategy that has to have a blend of both i.e. a focus in planning as well as supply chain responsiveness to achieve our lean objectives. I echo comments from Charles Stuart (Director at TGX Limited) who says that – “Puneesh, I would like to clarify my view - it is as you also approach it - a blend of both. A forecast is a forecast - a guess, a prediction etc. Good tools and good process will generally make a better forecast. But fewer businesses put the same kind of effort into LT reduction which can have responsiveness and an inventory benefit. I have worked in businesses that have done both approaches with significant benefits from each element. I suggest it should not be either/or but both”

Before I sign off, I would like to thank all the experts who shared their approaches and thoughts on the topic. I could not highlight comments or inputs from all contributors in this post due to similarity in thought communication in rest of them but tried to capture the essence of all so that readers get to know from who’s who of the corporate world on the future strategies on the topic and accordingly design the same for their organizations.

Inventory Optimization: Where to Focus and How?

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Traditionally, it has been understood that to improve customer service you have to have high levels of inventory. This ensures that orders are filled quickly. But it also means that the value of your inventory is high, to the detriment of your organization as it ties up cash and warehouse space that could be put to other and better uses. Managing inventory can be a daunting task for an enterprise with tens of thousands of products that are located in hundreds of locations. The fact that different functions in the organizations have different objectives and often conflict of departmental or sub-business interest adds another hurdle in inventory reduction.

Typically, the sales & service head of the organization will want the order fill rate, customer service and the order fulfillment lead time to be the best. This person will never want to lose any sales or for that matter do not want to see customer satisfaction going down just because the organization either could not supply the new product or the service parts at right time. This department will want that the organization should:

• Keep enough inventory of all product models or variants at multiple locations so that there are no stock outs, minimum transit time for product shipping and no unit down (production stopped) cases for their customers
• Make manufacturing operations flexible enough to respond quickly to changing market demand for a particular product model or variant so that they do not lose sales of a single unit for want of timely supply
• Ensure that the procurement & sourcing functions have quick replenishment efficiency with low supplier lead times or procurement starting at high safety stock levels

All of the above will lead in increase of inventory and will contribute towards what I call as reverse optimization of inventory.

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Let us see now, what will a manufacturing leader want to make sure, so that the success KPIs for the shop-floor are met and the production team increase production efficiency in terms of producing more units in same time, less over time is required and rejection rates are at the lowest ebb. Simple logic suggests that if the same model or variant is produced for a longer time, the jigs and fixtures will not need to be changed; the operations sequence will remain same and transition between production shifts will take minimum time – all this contributes to better productivity or efficiency in the production line but at the same time, producing not based on demand but to stock so that the production efficiency targets are achieved, will inflate the inventory.

Both the above examples are not bad practices and in-fact these are seen as best practices in industry if we see them in isolation, as they deliver value for independent business functions. The negative impact of these practices is that they make the job of the inventory owner more difficult.

The inventory owner’s main objective is to reduce the inventory to the lowest possible level so that more working capital is available for operations. This objective, as we saw above, conflicts with the manufacturing and sales/service business function’s objectives and this is the reason why inventory optimization and not reduction is the activity where we should focus on.

If the inventory owner decides to reduce the inventory in isolation based on some fuzzy logic which might be the best, keeping in mind different demand variations and patterns, it is highly likely that it will hit the objectives of other business functions negatively and the whole purpose will be lost. But, if the focus is inventory optimization in such a way that there is a trade-off between service levels and inventory level, production efficiency and order fill rate and so on, only then we can it a real win-win situation where organization as a whole, can gain substantially.

It is not that compromise between different business functions is the only way to optimize inventory. There are more factors that drive this initiative and can substantially impact the result. These are:

• Forecast accuracy – More is the accuracy of forecast, better will be inventory planning vis-à-vis market demand. So with less inventory, you will be able to maintain or increase your order fill rate and service levels
• Supply Chain Visibility – If, it is known to all stakeholders that the required material is in the way and will reach in a day or two, it will help in correct promises to the customer and while customer satisfaction will improve with better delivery performance, the inventory will also get optimized as no unnecessary panic buying will happen for emergency orders. Also, supply chain visibility means visibility of goods in the distribution centers or warehouses and other channels so that fastest and most economical way of shipping can be achieved which will again make sure that double inventory is not being purchased for a product that is available in some other warehouse or distribution center
• Supplier Lead Times – Less time to get supplies from supplier means faster replenishment and less time an inventory will stay in the warehouse. This also means that you will need to keep lower safety stock levels and thus overall inventory will be reduced
• Inventory turns – More is the number of times you sell and replenish your inventory in a given period, more will be available working capital and less will be obsolescence. The inventory carrying cost will reduce as a result, which is a key KPI of Inventory optimization
• Inter warehouse transfer – An analysis of inventory movement across warehouses might tell you that there is some inventory lying in couple of the warehouses for long with no demand for them in last 6 months and very low forecast in next 6 months. If this process can be automated to do the analysis and transfer the slow moving or dead inventory from one warehouse to another where it can be consumed faster, the inventory can be optimized considerably
• Field returns process – Lot of field engineers get the inventory (mostly service parts) issued from warehouse to service customer(s) and at least 40% of the time all issued parts are not consumed at the location. These parts are either kept at customer location or in the service van of the field engineer and either becomes obsolete/expire or are not visible at all for supplying against other demands. This results in duplicate buying and hence more inventory than required. A proper process around this, can not only ensure lesser inventory but will also reduce scrap (obsolete) inventory
• Accuracy in Bills of Material – Incorrect bills of material often increase inventory. For example, after a design change a casing will need only 5 bolts instead of 7 earlier but since the BOM was not changed after design change was approved and implemented, it still shows 7 bolts and every-time 2 extra bolts are getting issued as part of the back-flush which results in excess unused inventory in WIP. The production in-charge will return the excess parts to inventory as and when the priorities allow and till that time, more procurement of same part will be done based on the available visibility which results in inflated inventory. Correcting the bills of material will help in controlling this inflation of inventory
• Lot Sizes Review – Since the safety stock, demand and lead times that impact the inventory level requirements, keep on changing, a regular review of the lot sizes of items for procurement will always help in making sure that the procurement is as per the finalized strategy of stocking and will in inventory optimization
• Inventory accuracy – Lastly, if we are optimizing something but do not know the exact picture, then it is obvious that where will we reach. We need to make sure that the physical inventory matches the inventory in system as all the calculations on service levels, order fill rate etc. will be based on it only.
  

So, we saw that while it is important to iron out the conflicting interests between different business functions by discussing and finalizing the service levels, production efficiency and other KPIs along-with the inventory levels so that all business functions work as a team on one strategy and with same objectives in mind, there are other ways too that can help you in achieving optimized inventory without impacting other functions operations.

Demand Planning, Forecasting and Inventory Management's Role in Lean Manufacturing

Years (or is it decades) have passed after the introduction of Lean Manufacturing and the Lean Pandits still differ in their thoughts on what exactly is Lean and how it should be performed to get maximum benefits. A new school of thought that is emerging these days is that we need to identify first that 'how much lean' is lean enough and the role of technology (read ERP and SCM Software) plays a major role in maximizing the Lean Manufacturing benefits. The typical gains that a manufacturing organizations aim to attain through Lean is reduced inventory but still better fill rates, lower cost of manufacturing and distribution (Lean Distribution) , shortened cycle times and hence low inventory carrying costs are always on the wishlist. These objectives though, can be hit substantially with the limited knowledge the organizations have on their current performance but often they are caught trying to make out how can they measure where they were before the exercise and where they have reached. How much exactly they improved in terms of key performance indicators? Without additional software modules (such as forecasting, demand planning or Inventory optimization), a basic materials resource planning (MRP) or enterprise resource planning (ERP) system, it will not be easy for them to drive lean benefits completely.

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Lean focuses on execution, but you cannot get the most out of execution unless you do a better job of planning. You can perfect your shop floor execution according to lean principles, but if you're not making the right item at the right time, you are not going to win in the market. Execution alone is not enough. Demand planning, forecasting and Inventory optimization are areas of focus when applying technology to aid your lean initiative. Other than this, the major technology input is in the field of automation of manufacturing and distribution processes.

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While Demand Planning and Forecasting engines will help in right sizing your inventory, automation of manufacturing processes will help reduce the MFG lead times, increase MFG schedule compliance and will contribute in improving inventory turnover. The latest research report by Aberdeen "Lean Manufacturing: Five tips for reducing waste in the supply chain", also suggests that the one of the top actions for becoming best in class organization is that we need to leverage automated Lean Manufacturing and Supply Chain Tools.

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But the facts suggest that Manufacturers are understandably reluctant, especially now, to buy a lot of software modules they may not end up using right away. This is true more for the SMBs as they can not afford to have the same budgets as their larger enterprise counterparts and hence less utilization of technology in maximizing Lean Benefits. Moreover, they don't want their managers staring at the terminals as opposed to walking around the shop floor. But that is beginning to change now with at least some SMBs taking lead to incorporate technology inputs as part of the whole exercise as they have understood that have an equal need for supply chain visibility and better forecasting as their larger enterprise counterparts.

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The mantra, in my view, should be to Think Big, Start Small and Scale Fast when the organizations, specially the SMBs start to use the technology in this endeavor.

Finally RFID started bearing fruits and how

Back in 2005, on a sunny sunday, I was going for my weekly grocery shopping in Budapest when I saw the giant new electronic bill board getting lot more attention from people around. I found some employees of a local company using that new billboard to advertise their RFID Capabilities and they were engaging people with the help of few sets of shoes that they were offering people to wear after registering their name with them and take a round of the shops around for few minutes. When anybody wearing those shoes used to pass the bilboard, it used to flash his or her name on the billboard like: Welcome to XXXX (Company Name), Mr. XXXX. It was quite fun for people, specially for children and youth to wear those shoes and walk around to see their names on the billboard again and again. Upon enquiring, I was told that this is the pwer of RFID technology and this company offers multiple products harnessing RFID power. Though, RFID started showing head in 2003 in most markets (Largely as a result of mandates from retail market leaders, notably Wal-Mart), it was my first 1st hand experience with RFID technology and to say the least, I was impressed.

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I wondered what is in store for this technology and how warehouses and retail markets can track the movement of goods in and out with this, reducing manual intervention and improving accuracy. RFID showed lot of promise and lot of companies started investing in providing services in this field to be ready for future explosion in demand. We saw Wal-Mart persuading (or compel) its primary suppliers to tag everything under the sun with RFID. Wal-Mart would then use RFID tag readers and ancillary hardware and software to manage supply chains, retail stocks and costs more effectively. Similar mandates were seen from the U.S. Department of Defense (DoD), which reportedly planned to use RFID to manage and deploy assets more efficiently. The future had something else in mind and till last year, the growth in this field was snail pace and it nearly became a subsiding trend where service providers were no more investing. The costs of RFID enablement were higher than anticipated, and the inability or unwillingness of companies (including Wal Mart suppliers) to bear those costs were the main reasons of trend not picking up as expected. The nail in the coffin was the strong presence of bar codes that ensured that the primary benefits of RFID are met with much less costs. Well, barcodes cannot do everything RFID can do but nor can RFID do all of the things barcodes can do so these needed to co-exist.

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Some months back, BGN, the Netherlands' largest book retailer who was one of the early adopters of RFID, claimed that they could improve their inventory visibility from 65% to 97.5% by using an RFID Solution. Also it has increased receiving accuracy to 100% while dramatically reducing employee inventory time. Most importantly, BGN had significantly increased sales as well. Similarly, more examples of improvement in Inventory levels and accuracy started coming from aroundthe world and when the technology advances in RFID complimented it (Like tag readers are now faster and more accurate and can operate over a greater range of distance, angle and environment), the new wave of optimism started sweeping the space again. Year 2009 (April onwards) saw a spike again in the RFID demand and even the smaller warehouses are now looking for cost effective solutions in this technology to reap benefits in terms of inventory optimization. After all, RFID isn't really about tags, readers, frequencies or wavelengths, although all these things matter. RFID delivers the greatest business value when its focus is on the generation and leverage of real-time, fully integrated data that enables better business decisions and nimbler business actions. If all organizations drive their RFID deployements on above reasons instead of just wanting to utilize a trendy tagging solution that automates the stock movement tracking, this technology will go much far and will begin to realize its true potential in near future.

Inventory Optimization: Another Insight to unlock working capital - Part 2

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Welcome to the world of Supply Chain again...

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Last time I said that Robust control on "Naming Convention Following Process" can reduce inventory and improve supplier negotiations. Let us start with couple of practical scenarios from industry.

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On 1o-Jul-09, a customer service executive, while talking to a customer for an over the phone order fulfilment, when entered the item "MW Metal Rotor Blade 17 inches " in the ERP/ System, found that the quantity ordered for that item is 6, whereas they have only 5 items in the warehouse. She took the order, entered the order, back ordered it - the ATP engine runs and she gets a date of its availability in warehouse. She tells the customer that the 6th item will be available on the said date and do the customer wants them to ship the 5 items now and the 6th item on that future date. Customer disagrees and asked to send all 6 on the said date only. The conversation ends and she started taking the next call.

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The planning engine of the IT system, saw the demand, checked supply available and accordingly planned a new purchase order for the item equal to the safety stock of the item that was 10. Everything worked well as per the script and the item arrives in the warehouse and got shipped to the customer.

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Now, the 2nd scenario is the same company same day (1o-Jul-09) - another customer service representative got a call for the same item and did the same thing in system. He entered the item as "MW Rotor Blade 17 inches" and found that the stock is 17 whereas the customer wanted only 1. The order got fulfilled immediately and since the quantity was more than the safety stock, planning engine did not take any action.

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What did we see now? I think we got the pointers now, as how the inventory for the same item increased by 10 and since this item is a high valued item ($500 per item), the inventory went up by $5000, not a small number by any standards. Just because the same item was named differently in the system and even customer service executives know it differently, the stock went up. But, look at the customer service levels - even at a high inventory the service level got impacted by no availability of one name of the item so double impact.

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The 3rd impact of this issue is that when you buy quantities from supplier, naturally you buy small quantities and hence you have low negotiating influence but if we club the demand of both these names of same items (and who knows how many more names of same item exist in the system and for how many different items), we have a larger order and hence more influence, we can exercise while negotiating with suppliers.

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Same can happen with the supplier names also, if different departments define the same supplier in the system by different names (assuming low control on naming conventions), they can end buying from same suppliers with different names and hence lose the potentially more influence to negotiate harder. In large companies, the impact of this small anomaly is quite large and my experience says that this issue exists in almost all large companies and just the extent is different. Some companies have this issue limited to just <10> 50.

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Now, what do we do if we want to check if we have similar issue in our system or not. So, there are intelligent data cleansing tools available in market that will extract the data from your ERP/System as per the rules defined by you, transform the data into an excel for analysis and correction and help you making changes accordingly. In these testing times, overlooking this issue is a crime and we all must take care of this as soon as possible in our organizations.

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Inventory Optimization: Another Insight to unlock working capital

Does this excite you? Do you get following questions in mind?

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How true is this and how practical is this? Is it really do-able? Do I need to mobilise resources to do this? If it was so apparent then why the major research firms have not highlighted this yet? Is it just another consulting mantra, that shows you heaven and asks you to die to reach there?

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I am sure to see mixed reactions at above fact and questions. Some might agree, few will have doubt and want to see an example or detailed description and others might just ignore this. Well, if you ask me - this is the most easiest of parts that are under our control to reduce our inventory carrying cost. This also brings in substantial savings in our supplier negotiations and vows the Chief Sourcing Officer of an organization.

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Please wait till this Saturday when I will write the next post with the how part stating what is this exactly and how can we reduce inventory and improve savings from supplier negotiations utilizing this.......Keep thinking, till then :-)