The Longer The Lead Time, The More Inventory In The System

Probably a better way to state this is the longer the lead time the more exposure and liability you have. I’m always amazed by the manager who says don’t ever run out of inventory, but never have more than 30 days of inventory. And they says this for a 16 week lead time item. I’m also amazed by the manager who want suppliers to ship instantly but with no exposure on the manager’s part to any inventory liability.

It is possible to not carry as much inventory. Just think of your supply chain as a pipeline and bring in materials as they are needed. This however will not get you away from the liability to the supplier for

the commitments they