Less is More: Increasing Manufacturer’s Efficiency Through Inventory Reduction

As any manufacturer will tell you, and justifiably so, inventory is the lifeblood of a company. It is the basis on which sales are conducted, revenues earned and salaries paid. In fact, according to a 2008 Gartner Inc. survey, results showed 43 percent of supply chain managers based in North America felt inventory forecast accuracy remains a top business challenge1. As such, it is only natural that manufacturers prefer to obtain a healthy inventory as a secure business plan. While it may be instinctive to overstock inventory to protect future shortages, it requires a shift in mindset to realize inventory reduction is actually a more cost-effective approach for manufacturers.

Manufacturers must think critically about their inventory strategy for greater overall business operations. The best way to accomplish complete inventory control is through a fully functioning enterprise resource planning (ERP) software system, which empowers manufacturers to carefully and strategically manage inventory levels for a leaner and more efficient supply chain. With a lean supply chain, companies will minimize costs and maximize profits while meeting customers’ needs at every step.