12 Ways to Reduce Inventories

Inventory takes on a lot of different identities within a manufacturing company, depending on who's doing the looking. An accountant sees inventory as an asset, a controller sees it as a liability, a production supervisor considers it a safety net, while a materials manager finds it a tightrope. One common aspect to inventory, though, is that everybody agrees that holding it can be costly. The following are a dozen ways to reduce inventory, suggested by supply chain consulting firm Cornerstone Solutions:

1. Reduce demand variability
2. Improve forecast accuracy
3. Re-examine service levels
4. Address capacity issues
5. Reduce order sizes
6. Reduce manufacturing lot sizes
7. Reduce supplier lead times
8. Reduce manufacturing lead times
9. Improve supply reliability
10. Reconfigure the supply chain
11. Reduce the number of items
12. Eliminate questionable practices

See Also

• U.S. Logistics Costs Hit Record High
• Top 5 Supplier Quality Challenges
• IBM Opens Supply Chain Innovation Center in China
• Manufacturers Are Passing the Buck on Their Green Supply Chains
• Green Logistics: By The Numbers