Lean Thinking in Wholesale Industrial Distribution

June 6, 2016 by NetPlus Alliance

The Problem with Traditional Inventory Management in Wholesale Industrial Distribution, a Guest Blog by NetPlus Alliance Service Supplier, Howard Coleman, MCA Associates

In Part 3 we promised to expand upon the difference between “Push vs Pull” inventory replenishment and how it serves to “exploit the constraints” we discussed.

Now, I happen to think this picture is worth a 1,000 words!

It raises questions.

Why should you pay particular attention to this illustration and the concept of “PULL”?

Why does employing “pull replenishment” vs. “push replenishment” provide more accurate customer “buy signals” (signals of actual consumption versus forecast)?

Why should you lean towards keeping buffer inventory at the distribution center or main warehouse (CDC), versus keeping too much safety stock at each branch?

Why do you need to develop “Target Penetration Signals” or other types of alerts?

Why should you be thinking differently about your relationships and collaboration with suppliers?

Summing Up

Anticipating customer demand is a quickly moving and elusive target. Inventory management for wholesale distributors is a mission critical function.

So, begin to think differently about inventory flow, specifying the critical success factors and how that change in thinking will provide an improved return on your inventory investment and service levels.

This change in thinking is your real call to action…

Begin answering the “call”. I urge you to visit our website at: www.mcaassociates.com Read our definitive whitepaper; The Business Intelligence and Supply Chain Management Challenge.


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