Inventory Reduction: Effectively Turning Excess Into Cash    •
Written By: R. Michael Donovan   • Published On: May 16 2002
In virtually all manufacturing companies, there is a direct
correlation between inventory levels and overall business
performance. According to Harold Geneen, the legendary financial
genius and former chairman of ITT, "all the problems of business
end up in inventory." Most knowledgeable executives would agree
with Geneen. In fact, CEO's and CFO's believe that their
companies consistently carry 25 to 40 percent or more inventory
than is needed.  Assess Your Capabilities  Ask your material
planning and operations team to answer the following four
questions.  1. Do you have effective, fact-based decision-
support for identifying and prioritizing actions to stop
unnecessary material inflow to inventory by dollar impact? 2.
Does your decision-support system pinpoint undesirable inventory
dollar movement by item? 3. Do you have decision-support
capability that continuously assess specific it