How effective have just-in-time strategies, supply chain management practices and related practices been at reducing inventory levels over the long haul? Not as effective as had been hoped, according to a study by James Ginter and Bernard LaLonde of Ohio State University. They examined the inventory-management performance of thousands of companies between 1979 and 1999 using 10-K and related financial reports of publicly traded companies in 14 industries.

Overall inventory ratios decreased in nine. For two industries – apparel and food products – the adjusted total inventory level grew. For the remaining three – furniture, medical products and other consumer packaged goods – inventory showed no significant change.

The results (available at http://fisher.osu.edu/scmrg) also showed that inventory levels for raw materials and work-in-process (WIP) declined in the majority of industries. However, finished-goods inventories increased in seven: apparel, chemicals, electrical/mechanical equipment, food products, furniture, medical products and other consumer packaged goods. The retail/wholesale industry showed no definable trend in finished-goods stocks. "Our hunch is that companies have greater control over their internal processes and [therefore] can control raw materials and WIP," says Ginter. "Finished-goods inventories are driven in part by the customers."