Effective inventory management practices are gaining importance as distributors reduce inventory levels in response to demand drops and a renewed focus on cash flow. This article examines best practices for approaching the task.
In mid-November, sales for many distributors - with few exceptions - plummeted. Distributors were caught with excess inventory in an environment of much lower demand.
Many distributors are now working down inventory to maximize cash flow. And they have returned to a focus on the basics: accurate forecasting, reliable safety stock parameters, improving communication with vendors and getting a good handle on the product that is already in their warehouses so they can avoid overstocking.