Companies must be forced to rethink conventional wisdom regarding inventory. Inventory is one of the largest, most expensive and most detrimental impediment to the flow of the value that your business delivers. It fosters over ordering for lower unit prices. It breeds obsolescence as the inventory becomes stale and unused. While inventory is considered an asset on the balance sheet, everyone knows the dirty little secret that much of it is obsolete and will have to be reckoned with (written off) at some point in the future. When setting up a new client, many times we have to inherit inventory from their previous vendor. An analysis of the inventory reveals that 20% and up to 80% is obsolete and valueless.
Enlightened clients understand the issue and are partnering with strategic sourcing vendors who counsel them on the folly of over ordering for lower unit prices. Vendors who move as much as possible to print on-demand are providing their clients a great service. Further, 90 days of inventory, closely monitored, makes much greater sense than the 6 months to 12 months inventory typically carried in the industry.
Cal Popken
COO
