With inventory reduction there are essentially two actions that you can take: remove existing inventory or reduce the amount of inventory going in. We call this the bathtub principle because it is similar to pulling the plug in a bathtub to let water out or closing the faucet to reduce the amount going in. Just as long as the net result is less in and more out you will achieve a reduction in your inventory.
The previous actions discussed in this series of articles dealt with removing inventory items: Action #4 is the first of the actions relating to ‘put fewer items in.’
Action #4: Change the Factors that Drive Safety Stock
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