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It was Apple CEO Tim Cook who called inventory “fundamentally evil.” But a lot of manufacturers and retailers don’t seem to agree with him.
Cook is widely known as a master of supply chain, so his admonition against inventory as a drag on profits should be taken seriously. Over the years, in fact, we’ve seen multiple management concepts pop up that are intended to minimize inventory: Just-in-time. Build-to-order. Lean operations. So why have inventory levels been on a decade-long rise? That’s the conclusion of a report by Transport Intelligence Ltd. (Ti) on inventory trends, based on data from the financial reports of 187 manufacturers and retailers around the world. It shows that companies in 2017 were holding 10 more days of stock than in 2008. On this episode, we discuss the factors that are driving an increase in inventory levels, with John Manners-Bell, professor and chief executive of Ti. We hear about the influence of Amazon, the work of Walmart, the impact of technology and a newfound awareness of supply-chain risk. The big question: are JIT and Lean dead? Hosted by Bob Bowman, Editor-in-Chief of SupplyChainBrain.
Look for a new episode of the podcast, which can be downloaded or streamed, every Friday on the SupplyChainBrain website and Apple Podcasts.
Ti’s report: Inventory Benchmarking Vertical Sector Trends.
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