Rational Decisions

Retailers and wholesalers have made significant inventory adjustments over the past 18 months in response to declining sales. This restructuring has impacted the manufacturing sector hard as they lose not only the reduction in sales, but the¬†associated downward adjustment in inventory levels as well. The question is whether an uptick in sales will be accompanied by an associated increase in stocking levels, leading to an exagerated uptick in manufacturing requirements. If optimization techniques are properly applied, then we should expect to see some increase in stocking levels as consumer demand increases, just as we have seen stocking levels decline with decreases in consumer demand. This makes the task of managing manufacturing resources all the more critical during these periods of drastic demand swings…

SUPPLY CHAIN STANDARD: Rationalised and Optimal

July 1, 2009 — The current recession has seen massive¬†destocking by retailers – is this the new norm or will the shelves fill up again come the upturn?



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