According to a new report from Aberdeen Group, during these times of economic uncertainty companies are actively seeking best practices for reducing inventory holdings throughout their multi-tiered supply chain networks. In fact, reducing inventory is the top action companies have taken in response to the recession, as reported by 54 percent of survey respondents. The study, titled “Inventory Management: Three Key Strategies to Freeing Working Capital” is co-sponsored by Supply Chain Consultants, a leading provider of supply chain software solutions.
“For many companies, especially with global supply chains, inventory is the biggest lever impacting their working capital position,” said Nari Viswanathan, vice president/principal analyst with Aberdeen. “Due to increased global complexity, companies are experiencing long lead times and high demand volatility. This has resulted in an increased emphasis on managing inventory. Identifying the best practices and the best tools to accomplish this become critical.”
Companies are looking for practical initiatives that can unlock working capital while also maintaining high levels of customer satisfaction. With 62 percent of companies reporting a drop in customer demand over the past year, focusing on inventory is critical if a company wants to avoid a spike in write-offs as a result of a build-up of stock that can’t be sold. Findings in the Aberdeen study show that a full 91 percent of companies indicate that they are involved in reviewing opportunities for improving inventory performance through process change. Sixty-one percent of respondents say they have made, or have been asked to make, inventory-related technology recommendations within the past six months.
The study also examines how Best-in-Class companies are able to continuously manage inventory throughout their supply chain to improve customer service levels, forecast accuracies and perfect order metrics using the principles of closed loop inventory management. Best-in-Class companies are also more likely to use a technology enabler in key inventory management events, including demand analysis, inventory segmentation, inventory optimization, inventory replenishment, extended inventory visibility, event management and responsive execution.
“Inventory management and the information technology supporting it are critical in weathering the economic recession so many organizations are facing today,” stated Sujit Singh, Supply Chain Consultants’ chief operating officer. “The Aberdeen report on Inventory Management reinforces what so many of our customers are already putting into practice – that effectively managing their inventory levels and using the right technology to help them do so, helps provide them with a competitive advantage during an economic down turn and the ensuing rebound.”
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About Aberdeen Group, a Harte-Hanks Company
Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to AberdeenTM for insights that drive decisions.
As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information – Opportunity – Insight – Engagement – Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.
About Supply Chain Consultants
Supply Chain Consultants, founded in 1993, is a software and consulting company with headquarters in Wilmington, Del., and European operations in Antwerp, Belgium. The company provides a wide range of technology and process solutions for enhancing productivity and reducing operating costs in the supply chain. Such major corporations as Hexion, Terra Industries, Sunsweet Growers, ANADIGICS, INEOS and Akzo Nobel use SCC’s Zemeter products. For more information see www.supplychain.com.