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How Do Companies Perceive Opportunities to Reduce Inventories Across the Supply Chain

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CSCO INV1

Few Companies Believe they are Excellent at Managing Inventories Network-Wide; What are the Top Barriers to Improved Performance?
by SCDigest Editorial Staff     

Last year, our Chief Supply Chain Insights research arm issued an excellent report on better managing network-wide inventories.

That report was based in part on a major survey of inventory practices and perceived opportunities in improving network-wide inventory management, based on respondes from over 300 SCDigest readers.

The full report was made available last year, and it can be downloaded here: Five Strategies for Improving Inventory Management Across Complex Supply Chain Networks

It turns out we never published a separate article with some highlights of the findings, and think it is not too late to do that here in Q3 2012.

As noted in the report, a variety of factors are combining to increase supply chain network complexity for most companies. Those factors include:

• Increased global scope and reach that must be managed

• Increasing virtualization and resulting loss of visibility and control

• Challenges resulting from multi-channel go-to-market strategies

• Shrinking product lifecycles not only in well-recognized areas such as high tech and electronics but in virtually every manufacturing sector.

• Multi-channel commerce

That overall complexity of course increases the challenges of managing inventory effectively across the network.

Among the many survey questions and charts, CSCO Insights asked respondents how mature they thought their companies were in terms network-wide inventory management processes.

The results are about what we might have expected: just 8.5% said their current processes have reached an "excellent" level, though 27.5% said their processes were "good."

Importantly, however, that leaves just over 60% said their current processes were average or worse - meaning the majority of companies have a lot of work to do to tackle the network inventory problem holistically.

The story was much the same when it comes to the maturity of technology enablement companies have reached to manage complex network inventories.

Here, just 6% of respondents put themselves in the "excellent" group, and 24% in the "good" category, both numbers down a few percentage points from the process maturity perspective; some 70% rated themselves as just average or worse.

Said one electronics industry respondent: "I think many of us have supply chain and inventory management technology that was built for a different time, or at least a different level of understanding. We need something new to manage this challenge effectively today."...Read more on SCdigest

Last modified on Friday, 07 September 2012 11:44

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3 comments

  • Until that new knowledge to manage current challenges emerge, we may need to attain requisite level of understanding to cope more effectively. Visiting this site has been most beneficial to me but how to reference Christophe in my work is still a poser.

    Adebiyi, Oluseye Akano Saturday, 29 December 2012 15:22 Comment Link
  • Until that new knowledge to manage current challenges emerge, we may need to attain requisite level of understanding to cope more effectively. Visiting this site has been most beneficial to me but how to reference Christophe in my work is still a poser.

    Adebiyi, Oluseye Akano Saturday, 29 December 2012 15:21 Comment Link
  • Great article ! Thks. Amazing to see that companies themselves are clear about their lack of inventory management !

    Pierre-alain Wednesday, 05 September 2012 15:22 Comment Link
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