Sales drives Inventory

"Sales drives Inventory" and NOT "Inventory drives Sales"

I was driving this message across when I was leading a group of Managers on "stock ordering" for a new business venture.

Whether it is a manufacturing plant or a trading company, high stock inventory, locks up cash flow and thus liquidity resulting in a poor and unhealthy organisation. If it is not remedied, the organisation will definitely ends up as "toxic" and eventually insolvent.

Thus, there is a need to understand and practise the art and science of inventory management.

Healthy, effective, productive and high performance Company manages stock inventories well.

Thus it is important that Managers responsible for inventory management understand the total supply chain and align themselves with realistic sales performances and projections from the Marketing & Sales department to achieve optimal inventory level as defined by the Company Policy.

Companies should send their Managers for learning and training if there are inadequate knowledge and expertise. Relevant IT inventory software, tools and SOP must be in place and, unless specifically exempted, be strictly adhered to.

A healthy Company is a financially sound Company.

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