Mission impossible? The boss wants to double our inventory turns.

Abstract

Despite the prolific implementation of manufacturing systems, JIT principles, Kaizen events, and cycle time reduction programs over the past few years, high inventories still plague many companies. The assumption that implementing these principles and techniques will automatically result in inventory levels that satisfy management frequently proves to be false. Events like mergers, introduction of new competition, and a dropoff in business often trigger edicts to cut inventories. The cost of inventories also extends beyond the traditional accounting measurements to include hidden operating costs that everyone should want to eliminate. This article looks at the reasons for inventories and explores strategies for reducing them.