Even in “normal” times, achieving and maintaining a good inventory turnover ratio (ITR) is a balancing act. Manufacturers don’t want to have to restock too often, but they also don’t want inventory piling up, or worse yet, becoming obsolete....
Even in “normal” times, achieving and maintaining a good inventory turnover ratio (ITR) is a balancing act. Manufacturers don’t want to have to restock too often, but they also don’t want inventory piling up, or worse yet, becoming obsolete. The COVID-19 pandemic has raised many concerns about the supply chain and the need to adjust inventory levels. Depending on their business, some manufacturers have increased their safety stock to guard against further supply chain disruptions, moving toward a just in case (JIC) inventory system—at least for the time being. However, just in time (JIT) inventory systems will continue to be the management strategy of choice for most manufacturers, especially by the second half of 2021. Every manufacturer wants to become more effective in managing inventory to maintain a healthy cash flow and meet customer demand, especially during challenging economic times.
