Chuzz, this was in USA Today, this morning. Leigh
usatoday.com
New age inventories
Michael Dell, the 34-year-old whiz who changed the way America buys computers, is one on a roster of CEOs who has taken Japan's "just-in-time" inventory system a step further.
Texas-based Dell Computer builds machines to order, so they don't stock inventory until they know they need it. What's more, in 1996, it brought its corporate customer accounts, suppliers and vendors together in an online purchasing system that whittled inventories from 31 days to 13.
By 1997, through a variety of leaner manufacturing processes, the company was keeping only a week's worth of products in its warehouses. Today, Dell typically stores just what it needs for six days of production.
Dell isn't alone. Connecticut-based Pratt & Whitney, the aircraft engine division of United Technologies, cut its inventories 65% when it began, among other things, using bar codes and the Internet to provide suppliers with information about orders.
"Manufacturing has become much more efficient," says Ian Shepherdson, chief U.S. economist at High Frequency Economics. "Inventories used to be a very volatile part of the economy."
What's next: Economists expect inventory innovations to continue apace as technology and leaner manufacturing practices create more efficiencies for big manufacturers and their suppliers. |
