Companies adapting to recession and recovery are finding that the dynamic of inventory management is shifting, according to a new white paper from Tompkins Associates. "There have always been conflicting views on the proper levels of inventory, but now we see it elevated to a whole new height of organizational tension," says Jim Tompkins, president and CEO of Tompkins Associates and the paper's co-author. "It's not that the role of inventory has suddenly changed, rather it has evolved as organizations have become more focused on managing inventory at the same time that the economic picture has made it more difficult to manage."
Evolution to World-Class Inventory Management stresses the integration of people/organization, business processes, theory, and enabling technologies -- all aligned with the firm's business and operating strategies. The paper also discusses the managerial approaches necessary to move from Inventory Optimization to Sales, Inventory & Operations Planning (SIOP) and beyond to supply-chain-oriented product development, as well as SKU and supplier rationalization.
Co-author Ralph Cox, principal at Tompkins, sees advanced decision-making through SIOP as one of the keys to attaining world-class inventory management. "There are conflicts within companies that inventory optimization alone cannot address," he notes. "SIOP provides a platform for addressing any conflicts that deserve cross-functional management consideration."
