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Which one is best for your company? That may depend on who
you ask or what the current fad is. In reality, it depends
on the products you buy, the way your production is set up
and what your goals are. Let us start by defining each process,
and noting each concept's particular strengths and weaknesses.
Just-in-time inventory, is just that. You
schedule production of non-standard parts in such a way that
you receive only the quantity you need, when you need it.
Allowing your supplier to hold on to it until your ready to
take delivery.
The benefits are as follows:
•Reduced if not eliminated in house inventory management
costs
•Increased cash flow.
The disadvantages are:
•Possible increase in product costs
•Having a unexpected demand and not being able to meet
it because the need was not forecasted.
Managed inventory is not without shine or
stench either.
The primary benefits are:
•Having product in house at all times
•Reduced labor costs related to managing inventory
The disadvantages are:
•Decreased cash flow by taking delivery of product before
you actually need it
•You normally have setup charges.
•Increased expense related for managing inventory is
usually rolled into the cost of the products themselves.
Still unsure what is best for your company? You are not alone.
Let us submit a proposal based on your industry and the way
your company does business. We can taylor fit a solution specifically
for you. Please call your sales representative for more information.
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