Here is something to think about: it is easier for companies to achieve a 30% inventory reduction than a 3% reduction.
I know that this statement is counter-intuitive so you may be saying to yourself: How can that be, surely achieving a lower target is easier than achieving a higher target? After all, don’t you need to achieve 3% before you can get to 30%? Ok, good points, so let me explain.
The teachings of continuous improvement tell us that we can reach our goals by taking many small steps. This is incremental improvement and in many environments this works really well. Consider where a company executes cost reduction initiatives with goals of (say) 3% each year.
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