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Manufacturers increasingly turning to advanced information management solutions

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Manufacturers increasingly turning to advanced information management solutions

Recent study shows technology is crucial to effective inventory management.

After five years of anemic economic recovery, manufacturers continue to add inventory to their books much faster than GDP growth. In order to better manage inventory levels while still ensuring the right part is in the right place at the right time, manufacturers are increasingly relying on advanced information management solutions, according to a survey released by professional services firm PwC US in collaboration with Manufacturers Alliance for Productivity and Innovation.

Further, inventory turns – which indicate whether the supply chain is getting more efficient at moving goods from suppliers to customers – have declined steadily since 2011. The survey of senior executives from 75 global manufacturers (with US headquarters) attempted to better understand this decline in inventory performance and polled respondents on the effectiveness and benefits of using advanced inventory data management strategies to reduce inventory.

37% of respondents reported that their core ERP system was either not very effective or ineffective.

"Inventory is often considered by manufacturers to be the most valuable category of assets on their books; however, it can tie up large amounts of cash and diminish in value for a host of reasons," said Stephen Pillsbury, principal in PwC's US industrial products practice. "As a result, it has become common practice for manufacturers to minimize inventory as much as possible without hurting customer service levels. While they continue to focus on managing inventory, they seem to have reached a point of diminishing returns and are now turning to advanced information management solutions to further reduce their inventory."

Benefits of Effective Information Management Solutions  
When it comes to enabling agility, responsiveness and operating flexibility, 37% of respondents reported that their core ERP system was either not very effective or ineffective. Conversely, the other respondents with effective ERP systems were quite bullish on the usefulness of their supply chain visibility systems when it comes to replacing inventory and costs with actionable and timely data.

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