How Much Inventory is Enough and Too Much?
This table -- which indicates raw materials inventory levels of IW's Best Plants winners and finalists -- is not meant to identify the optimal level of days-on-hand raw-materials inventory. Too many factors can influence what makes sense for any individual manufacturer. That said, manufacturers should be asking, 'Am I carrying extra inventory because my suppliers are failing to deliver on time? Could I find a closer supplier that would allow me to reduce the level of inventory I keep on hand? Is my buffer this large because I can't trust my own processes?'
| Average days of raw materials inventory | ||||
| Year | Median | Average | Minimum | Maximum |
| 2008 | 20.1 | 24.3 | 3.0 | 98.0 |
| 2009 | 20.1 | 29.7 | 2.6 | 109.0 |
| 2010 | 22.4 | 33.5 | 2.0 | 104.0 |
| 2011 | 21.9 | 33.5 | 3.2 | 138.0 |
| 2012 | 26.0 | 28.0 | 2.0 | 78.0 |
| 2008-2012 | 21.5 | 29.4 | 2.0 | 138.0 |
Source: 2012 IW Best Plants Statistical Profile
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