My JP Morgan Chase banker sent his weekly economic report siting that “Massive inventory reductions related to workers and product has businesses as lean as ever heading into the 2H09 and 2010. This coupled with the expected global recovery lends to GDP growth of approx 4% in 2010 per JPMorgan research”.
Accurate or not, businesses do not enjoy investing in inventory that will not ultimately effect revenue and profit. While businesses (especially retail and distribution) should attempt to run as lean as possible, over-correction could cost them vital revenue, profit and cash flow.
Here’s where even basic analytics and a business intelligence strategy (historical demand trends, idle inventory analysis, etc.) can pay the large dividends of having the right items on hand while maintaining a lean working capital footprint.
