ABSTRACT
There are conflicting views about the benefits of stockholding. As business aims to maximise service and minimise costs, inventory provides the lubrication. Shorter lead times reduce stock, but only by a minimal amount. Inventory reduction should not start with obsolete stock, as it is not the major cause of stock value. Stock reduction is usually undertaken as a project, and concentration should be given to achieving the objective in a short time. Specific stock reduction can be achieved through a dedicated project. Continuous stock reduction is a background job for all inventory managers, but since insufficient focus is given to it, arranging a project tends to be more effective. Obsolete stock is defined as inventory with no foreseeable demand. The stock of a fast-moving item is likely to be consumed quickly and consistently through servicing a wide variety of demands from a large customer base.
