Wednesday, June 13, 2007

Reality? Trade Off of Inventory vs Customer Service

The classic arguement goes like this: Carrying excess inventory helps maintain good levels of customer service, but of course, hits the bottom line via inventory carrying costs. Sales and Operational planning attempts to manage both supply planning and demand planning to optimize inventory. Frequently supply chain professionals spend most of their time focusing on supply planning - because it is easier for us to control. Demand planning is often not emphasized to the proper degree because we either think that customers cant forecast their own needs, or that we cant impact customer demand - and to be a good supplier, we shouldn't even try!

What if we could send the message to our customers - Be predictable to us, and we will give you more reliable service. What if we held the opportunity in our back pocket that for a certain degree of predictability we could share our inventory carrying cost savings?

We believe there are numerous avenues to make customer demand easier to predict and manage. Give us a call, or send us an information request at www.SynchronousLLC.com

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