In these challenging times, even those with well-developed business continuity plans have been caught out, with too many of some products and too few of others – undermining production plans, distribution performance, service levels and cash flow management.

How do you now plan a recovery?

We recommend a review of each of the 7 basic components behind all inventory management.

Have the changes been recognised, analysed, calibrated and adequately addressed – or not?

Manufacturing and Distribution professionals, from both the Finance and Operating parts of the business, regularly express concern about the cash tied up in inventory… they want to set targets by item, category, supplier etc., in order to release some of that cash.

But inventory levels are not targets, they are outcomes of implemented policies and practices. An understanding of how these policies and practices will play out is therefore critical.

So, let’s go back to basics.

We have developed the enclosed 1-page checklist to facilitate a discussion between company leadership and planning personnel to support a self-evaluation of current status and gaps, and to set you on a path to manage inventory in the best way possible.

The outcome should be to set new and transparent inventory objectives, with frequent reviews to align on desired service levels, cash invested and short-term tactics.

We are presenting this as a discussion guide, but it can easily be viewed as a checklist to be followed as a recurring process, driving continuous improvement as you progress.