Increasing Velocity
One of the simplest ways to advance the efficient frontier is to accelerate the flow of goods across your chain. Acceleration improves efficiency because inventory doesn't stay in the chain as long, which brings down the costs of holding that inventory. At the same time, increasing the velocity of inventory enhances flexibility because it reduces the time required to change what's in the pipeline in response to changing demand. If it takes six weeks for your inventory to go from production to consumer, then your product mix will always lag behind demand by a couple of months. On the other hand, if it takes six days to go from production to consumer, you can change that mix in a week.
An obvious way to increase velocity is ...
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