The convergence of declining demand and rapidly deflating commodity prices has left many distributors holding onto significantly devalued inventory, no matter how good their inventory management systems were.
Why? Because distributors began stockpiling last year as prices climbed. When the prices plummeted, that stockpile didn’t look quite as good. Inventory levels jumped $6.2 billion in the fourth quarter, according to the U.S. Commerce Department.
(The Wall Street Journal recently ran an article, Firms Race to Regain Control Over Inventories, looking at how manufacturers are approaching the growing inventory problem.)
There are ways to mitigate this …
Distributors Left with High Levels of Devalued Inventory
The convergence of declining demand and rapidly deflating commodity prices has left many distributors holding onto significantly devalued inventory, no matter how good their inventory management systems were.
Why? Because distributors began stockpiling last year as prices climbed. When the prices plummeted, that stockpile didn’t look quite as good. Inventory levels jumped $6.2 billion in the fourth quarter, according to the U.S. Commerce Department.
(The Wall Street Journal recently ran an article, Firms Race to Regain Control Over Inventories, looking at how manufacturers are approaching the growing inventory problem.)
There are ways to mitigate this …
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- Filed In: Economic Trends, Free, Research & Analytics, Strategy, Subscriber Only
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