Let the (Excess) Inventory Flow!
P.J. Jakovljevic - January 26, 2007

The conundrum of inventory management and the notion of inventory as a "necessary evil" (or the "asset versus liability" dilemma) have long been haunting and bedazzling operations and financial and accounting managers. It is a well-known fact that managing inventory risk is about managing the cost of maintaining unnecessarily high levels of inventory against the risk of running out of stock at a crucial moment of truth (MOT) when a customer actually wants something. In a variety of aspects, inventory management is at the heart of the supply chain management (SCM) realm. Supply chain organizations are responsible for all the processes from sales and operations planning (S&OP) to customer fulfillment, inventory optimization, and new product delivery and introduction (NPDI)—all of which involve the planning and movement of inventory. Profit margins are also directly proportional to operational excellence in each of the above processes...