CSCMP's Supply Chain Quarterly
December 12, 2018
Forward Thinking

Study: Geography playing a bigger role in inventory control

A new Tompkins Supply Chain Consortium report finds that globalization is changing inventory practices.

More companies are controlling their inventories on the basis of geographical territories, according to the 2013 Finished Goods Inventory Management report from the Tompkins Supply Chain Consortium. The group canvassed 65 top supply chain executives in manufacturing, retail, wholesale distribution, and other industries.

Twenty-six percent of the respondents in the study said that controlling inventory is now a geographic responsibility, compared to 17 percent in a similar 2012 study. Still, a larger number of organizations—41 percent—control their inventory on a companywide basis, while 33 percent do so on a division level. The authors of the study stated that as companies become more global, geographies have come to play a greater role in controlling inventories.

In past surveys in 2010 and 2012, companies cited inventory turns as the most widely used metric for measuring finished goods. In this survey, however, the vast majority of respondents—92 percent—said their companies used the measurement of inventory balance, either by unit, monetary value, or weight. The second most used metric was inventory turns, cited by 82 percent, followed by days of supply, named by 78 percent. The metric "on-time shipment' was used by 77 percent of survey respondents.

A copy of Finished Goods Inventory Management: How Today's Outcomes Measure Up to Past Results can be can be requested via the Tompkins Supply Chain Consortium website.

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