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How Can High Tech OEMs Minimize Inventory Liability?
How does a High Technology Original Equipment Manufacturer (OEM) address the challenge of inventory liability during a downturn? By adopting an extended enterprise approach that optimizes inventory across the supply chain.In an article published in Supply Chain Management Review, Infosys' experts propose a proactive approach that spans the entire supply chain, from component suppliers and Electronics Manufacturing Suppliers (EMS) on the supply side to distributors and retailers on the customer side.
Infosys believes that OEMs can achieve a smooth integration of the supply chain by incorporating the principles of the Toyota Production System (TPS) that involves replacement of non-trust systems with trust systems. In addition, our experts recommend:
- Evaluating the terms of the contract to determine the scope of inventory liability
- Using systems and collaborative tools for visibility into statistics and trends of inventory, and finished goods inventory at distributor and retailer locations
- Developing metrics for the entire supply chain based on off balance sheet inventory liability to monitor performance
- Communicating demand forecast to Tier-1 and Tier-2 suppliers for efficient inventory planning and order realization
- Developing processes to enable faster turnaround during periods of uncertain demand
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