Inventory Management: 10 Questions to Diagnose Your Inventory Health [Archive.org URL]

CFOs and other senior executives already know the importance of inventory management. And yet even the most attentive managers often find it difficult to get it right. In our work with clients, we’ve found that decision makers often rely on external benchmarks that seldom deliver expected insights. And they make operating assumptions that send them down the wrong path. Two of the classic misconceptions: improving the accuracy of sales forecasts is the best way to reduce inventory and beefing up customer service requires keeping more inventory on hand. The fact is, both assumptions can lead to inventory gluts or shortages.

We typically ask clients 10 questions that take the pulse of a company’s inventory health. They are designed to assess the effectiveness of inventory reduction processes as well as the sophistication and breadth of those efforts.

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