Managing inventory- getting better, smarter

The high-tech manufacturers of the U.S. have improved their inventory performance over a 20-year period.

By Staff -- Modern Materials Handling, 4/1/1999

U.S. high-tech manufacturers have improved their inventory performance over a 20-year period beginning in 1977. By 1997 they were getting 4.8 turns per year compared to 2.5 turns two decades earlier (chart). That's according to a study by management consultants at PRTM.

Better management also translates into significant cost reduction and cash savings with which to run a business. PRTM calculates that these high-tech firms now need $1.2 trillion less in inventory, or a 48% reduction from the comparable figure posted in 1977.

Berg foresees inventory turns topping 5 per year as joint service agreements, build- and configure-to-order manufacturing, and global demand/supply planning enable true collaboration among supply chain partners. More information is available at the web site, www.prtm.com or by e-mailing Berg at jberg@prtm.com

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