Facts About Finished Goods Inventory Management in the Automotive Industry

Taken from the report, “Finished Goods Inventory Management Hot Topic Report:New Views on an Old Issue”

Finished Goods ReportDownload the full report here from the Tompkins Supply Chain Consortium.

Inventory issues impact operations substantially, especially when it comes to finances. Saving money by managing inventory efficiently is a major focus for most industry and market segments.

This report from the Supply Chain Consortium details the results of the Finished Goods Inventory Management survey, conducted with participants from companies in the manufacturing, retail, and distributor sectors. Findings include how companies are organizing to manage their finished goods inventories, how they benchmark, their best practices, and how finished goods inventory and customer service were impacted in 2009.

Facts from the Survey:

Finished goods inventory performance measures most used by automotive industry companies are:
1. Inventory Balance (Units and Dollars)
2. Order Fill Rates
3. On-Time Shipment

Ninety-one percent of survey participants indicate that finished goods inventory dollars were down in 2009 versus 2008. Eighty-one percent of survey participants’ inventory dollars as a percent of sales were down in 2009.

While reducing finished goods inventory levels, 36 percent of survey participants showed no reduction in overall customer satisfaction, while another 36 percent saw a slight increase in customer satisfaction.

The chart below shows changes from 2008 to 2009 to inventory dollars as a percentage of sales revenue.

Finished Goods Inventory Chart

The most significant areas where changes were made which allowed finished goods inventory to be reduced were in inventory policies and operational processes. About 11 percent of automotive industry companies are optimistic about future improvements to their finished goods inventory processes.

Download the full report here from the Tompkins Supply Chain Consortium.