Inventory Reduction: Preventive and Corrective Strategies

Down with inventory! Do away with inventory! So cry the advocates of the Just‐in‐Time doctrine—a doctrine that holds that inventory by nature is idle and wasteful and by reason is an encumbrance on the operations and finances of an organization. Their denouncements of both intentional and negligent stockpiling inspire reform and herald the redesign of operating systems along more utilitarian lines. But where should an organization begin and how far should it go to pursue the fundamentals of an inventory curtailment policy? If the quest starts with immediate reduction of stocks, must it deliberately end with complete systems conversion? The answer will depend on current circumstances and operating philosophies for the future, if there were no temporal, operational, or financial constraints on organizations, they would simply produce or replenish inventory as dictated by customer demand. Their goal would be to buy, manufacture, and distribute directly to the actual demands of the marketplace. It would be rational for organizations to operate with a demand‐driven pull system.