Inventory Buffers A Lack of Information - 0 views
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Brian Suszek on 04 Dec 10Where you have perfect information, you don't need any buffer stock. The less reliable information you have, the more inventory you need to hold. On a basic level there are two pieces of information needed: the reliability of the supplier to deliver to you and the stability of the demand from the customer. Inventory is a buffer for fluctuations in these two components of the supply chain.
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Brian Suszek on 04 Dec 10Sorry for the double post. However, I think that this article really gives voice to our inability to imagine a path to single piece flow. We have to have reliably consistent customer demand. What could we do next?
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Joe Bennett on 06 Dec 10Do what Toyota does - "How much inventory would we have to hold to account for variability in customer demand?"