Lean Supply Chain Management Essentials

Inventory ManageMent 117

front-line supervision, inventory reduction usually loses this battle. If the amount of

work is greater than the capacity, then the conflict is between inventory and priority

in the value stream. A winner in this case is less easy to predict. Sometimes priority is

sacrificed to capacity and inventory is decreased, and sometimes priority is the winner,

in which case we get the unseemly picture of overtime being worked while inventory

is increased or stays the same.

Because of this simple fact, that inventory reduction occurs when you produce or

buy less than you sell, effectively managing inventory reduction needs to happen in

the planning phase, namely, during executive sales and operations planning. If this is

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