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CONSIGNMENT CHALLENGES ...
As our case history illustrates, an effectively managed consignment inventory can be a very powerful competitive weapon. But as anyone who has ever tried to implement a consignment program with a customer knows, these programs can present significant challenges:
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The customer wants some of everything. The result – too much inventory, and still not the right items available when and where needed.
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The original stocking plan does not keep pace with the customer’s changing sales mix and volumes. The result – again too much inventory, and still not the right items available when and where needed.
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Usages or sales of consignment stock do not get reported to the supplier on a timely basis. The result – the consignment inventory does not get replenished, and the customer does not get billed.
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Valuable supplier sales time is spent performing the clerical task of verifying consignment inventory quantities.
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Inventory record reconciliations do not to get done on a timely basis. The result – unaccounted for inventory losses someone must absorb.
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