iP3 Systems

Supply chain mistakes can be extremely costly in the very best of times, leading to excessive cost, confusion and downright chaos. But in today's global financial crisis, mistakes are magnified. One major misstep could be catastrophic. As we head into 2010, supply chain mistakes can trash a balance sheet more quickly than ever, or leave incremental sales on the table in an increasingly competitive market environment. With most companies tightening both their belts and their inventory exposure, it will become more important than ever for suppliers to maintain supply flexibility without taking excess material risk. In this broadly deflationary environment, inventory is a poison and responsiveness its only antidote. Don't fight the facts. When you roll up the sales forecast next month and it shows orders are down xx%, resist the temptation to ignore the facts. It is not a forecasting anomaly. Your company is not immune to the global downturn. Everyone likes a good upside and prefers not to trim their forecast, so be assured that your customers are probably not sandbagging. Between stock prices, real estate values and commodity prices, the world has lost $50 trillion dollars in the last 12 months -- the single greatest contraction of wealth in world history. Cash is no longer king; it is now a ruthless dictator. Your company's balance sheet (more so than your products or technology) may very well be your single greatest asset. This downturn is real, cash is everything and inventory is huge potential liability that will likely continue to depreciate at an accelerating pace. Don't worry about the upside for the next quarter. Instead, focus immediately on exceptionally prudent supply chain practices.