Finished Goods Inventory Levels Fall While
Order Fill Rates Rise, According to New Survey
Tompkins Supply Chain Consortium Credits Smarter Planning
RALEIGH, NC, August 19, 2010 - More than half of the companies in a new survey saw a decrease in inventory levels in 2009. But despite reduced inventory levels, customer satisfaction remained the same or improved for nearly 80% of these companies, according to a recent Finished Goods Inventory Management Report by Tompkins Supply Chain Consortium.
“In 2009, companies worked very hard reducing inventory levels to improve cash flow and positively impact company financials,” says Bruce Tompkins, the Consortium’s Executive Director and author of the report. “The expectation was that order fill rates would be negatively impacted as shortages and stockouts became prevalent. However, the reality is just the opposite: Order fill rates actually improved.”
The report, which is based on a survey of leading manufacturing and retail companies, reveals that while the economy sagged and sales were off, companies found ways to substantially reduce their finished goods inventory levels. The top five reasons for these inventory changes given by survey participants are:
- Smarter planning (21%);
- Drop in sales (21%);
- Management focus (20%);
- Sales growth (11%); and
- Inventory mix (5%).
Other key findings from the report include:
- In general, inventory management is performed at the corporate level. However, if the organization is very large, the division-wide management is most often found.
- An inventory management department is often responsible for setting finished goods inventory targets, but the responsibility is typically shared by several supply chain functions.
- Inventory turns, inventory balances and days of supply are the top three measurements used for finished goods inventory.
- The supply chain areas in which changes are most needed with respect to this type of inventory are processes, people, and inventory policies.
For additional results from the report, download it here: Finished Goods Inventory Management Report.
To learn more about Tompkins Supply Chain Consortium, visit the website and choose the "new member" option. The Consortium also has a LinkedIn group and Xing group for qualified companies that are interested in staying current on the latest in supply chain benchmarking and best practices.
MEDIA CONTACT: Keri McManus, 919-855-5516
kmcmanus@tompkinsinc.com
About Tompkins Supply Chain Consortium
Tompkins Supply Chain Consortium is the premier source for supply chain benchmarking and best practices knowledge. With more than 500 participating retail, manufacturing and wholesale/distribution companies, the Consortium sponsors a comprehensive repository of 17,000-plus benchmarks complemented by search capabilities, online analysis tools, topic forums and peer networking for supply chain executives and practitioners. The Consortium is led by the needs of its membership and an Advisory Board that includes executives from Campbell Soup Company, Hallmark Cards, Hewlett Packard, Ingram Micro, Kraft Foods, Limited Brands, Miller-Coors, The Coca-Cola Company and Target. To learn more about how your company can become a member of the Supply Chain Consortium, contact John Foley, 919-855-5461 or visit www.supplychainconsortium.com.
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