Dispelling Inventory Myths
The ICS approach and methodology in respect of inventory performance management starts from a somewhat different perspective from that traditionally adopted. It views inventories also from a marketing and risk management point of view. Because of this different perspective, we have come to the conclusion that inventories and their roles are often misunderstood.
Here are some commonly encountered views.
Inventories are only supply chain assets.
Wrong! | They are primarily marketing assets.
Inventories produce only costs.
Wrong! | They also produce marketing investment yields.
Inventories are a necessary evil.
Wrong! | They implement strategies.
Inventories provide no more than availability.
Wrong! | They offer strategic marketing leverage in many other areas.
Inventories should be reduced at all costs.
Obviously Wrong! They are vital investments with yields that include strategic
These are alternative views to those that are commonly encountered, and could hold the promise of considerable strategic benefit to inventory stocking businesses.
Once they are understood in their most appropriate strategic context they can open doors to significant new initiatives aimed at competitive advantage.
A more detailed discussion on this topic is presented in our White Paper titled “Inventories as Marketing Assets”