product gets out to the customer later than expected. This can lead to additional inventory being accumulated, inventory that is not being purchased by customers. This inventory requires storage and warehousing space, which costs money. Effective businesses don’t allow inventory to be accumulated. To be specific, traditional businesses may use phone calls and sales forecasts to make more predictions. When the business is not advancing, sales become volatile and less predictable.
When considering improving businesses, most of the time, inventory is in transit with suppliers because the product is delivered as soon as its needed. When the product needs to be replaced on a store shelf, costs for storage space is reduced and the products get to the customer on time. The inventory is either being delivered or on a store shelf, there is little time for it to be in a warehouse. When following this procedure, the demand for the product is matched effectively. Wal-Mart is a perfect example for this. Customer takes a product off the shelf, brings it to the cashier, the cashier scans the item. Right away, the supplier knows one piece of inventory is needed. That one inventory item needs to be replaced. This instantaneous flow of inventory will help a business succeed. It is when there is good collaboration between the supplier and retailer, we find an effective supply-chain model.
Businesses should start moving towards new ways of decreasing cycle time. Basically, reduce the time it takes for a product to get from the supplier to the customer. When this happens, not only is the customer happy, so is the business owner. The owner is happy because he or she reduced costs on warehousing. Also, changing businesses will get an edge on their