ABSTRACT
Cost reduction opportunities are enormous. In the pharmaceutical industry supply chain, beginning with the retail drugstore outlet to the distributor to the manufacturer to their suppliers and their suppliers, the inventory can be as high as 100 days of supply. In the electronics industry where the supply chain has at least as many layers, it is said that the inventory can exceed 1 year’s supply, a particularly significant issue in an industry where products can become obsolete overnight. The reasons for the existence of this inventory are many. Some reasons are valid and some are questionable. A full examination within the context of the broad view of the value chain will bring a new perspective with potentially impressive cost reduction opportunities.
