A medium sized manufacturing customer recently asked us to come speak at their divisional buying conference focusing on Total Cost of Ownership, TCO. We happily accepted the invitation as this is something we discuss regularly with customers. It spurred a thought to share the most common issue we know of with the folks here.
An inside expert with over 30 years of supply chain and manufacturing knowledge shares the most common issue he sees:
“The tendency to overstock and mismanage inventory. Often, our customers need help with inventory management, as they tend to err on the side of too much, as opposed to too little. They spend to their budget. As such, they don’t think their way through the costs that can be associated with those actions. I try to advise customers that inventory means cost in other areas. It means that it will take up more space, and so that space is reduced the more inventory you keep. It’s likely not in a convenient location for the operators, which reduces productivity. You’re going to experience more excess and more obsolete inventory and lose out on cash flow.”
What are your supply chain pain points? Have you made improvements that resulted in cost savings that you’d like to share with others? We want to hear from you.