The Right Product in the Right Place at the Right Time
Competition is not just between companies. Competition is between supply chains. Supply chains compete for very fickle customers and they must respond quickly. The constraint of a supply chain is the number of customers. There is never enough demand. The conventional solution is to compromise by holding more inventory or less inventory. The result is high holding costs and obsolescence, or lost sales.
Currently, most supply chains push products into the distribution network. Sophisticated forecasting software is relied upon to plan the inventory. In most cases, there is more inventory of what is not selling and less inventory of what is selling. Discounts, slow-moving and dead inventory, year-end sales and poor financial performance are keep recurring.
The Theory of Constraints distribution solution, with rapid replenishment, reduces dependency on forecasts and manages the variation in demand. Have more inventory of what is selling and less inventory of slow items. Overall inventory is reduced. Market share increases and profits are dramatically higher.