To achieve that, key managers must take ownership of supply chain initiatives, and collaborate closely with each other and their partners. For example, tight communications between a manufacturer’s R&D division and its retail partners can help produce faster and shorter product life cycles, which can help decrease inventory levels. “We have to take the fat out of all the pipe,” Cuthbertson said.
The deployment of supply chain initiatives helped Circuit City improve in-stock levels, increase value-added service offerings, reduce vendors’ costs of doing business with Circuit City, respond more rapidly to demand trends for better forecasting, increase flexibility with vendors and suppliers, and improve system and data transparency for timely identification and closure of performance gaps, Cuthbertson said.
“The collaborative management of inventory is the only way we’re going to improve our pipeline,” he said. “We must eliminate all non value-added costs.”