Inventory Strategy: Maximizing Financial, Service and Operations Performance with Inventory Strategy

CHAPTER ONE

INTRODUCTION

1.1 What’s the Problem?

1.2 More or Less

1.3 Optimization

1.4 To(o) Lean or Not To(o) Lean?

1.5 The Inventory Journey

A few years ago I conducted a workshop for the operating committee of one of the world’s largest industrial conglomerates. The head of operations for each business unit plus the company’s chief operating officer (COO) participated. We had a question-and-answer session at the end of the workshop. The COO asked the first question: “Dr. Frazelle, we have quite a bit of conflict in these meetings, especially lately. Why is that?” I asked him what the charter of the group was. He said, “We have two main objectives. The first is to reduce inventory. The second is to lower our unit costs.” I said politely, “You ...