Reduction of Primary Materials Inventories

Primary materials must be available in order to manufacture. Optimization consists of a trade-off between availability and inventory. A standstill in production may be significantly more expensive than a generous stockpile. But there are other solutions for availability: Think of agreed delivery availabilities with your suppliers or consignment warehouses at your suppliers? premises. Both options can be better and cheaper than holding your own stock.

However, look at the quality of the stock: Are these items really needed in the numbers or quantities on hand? Should there perhaps be completely different items in stock?

Are there any slow-moving items among the primary materials? Take a look around your warehouse: If you see the fourth or fifth inventory stamp on items in your warehouse, you suspect that there is a need for optimization. Discuss how to handle such items with your operations team. Include people who really know the items. Managers are often too far removed from the real world and can’t find solutions. Let the team find decisions for such articles.


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