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Inventory - who's in charge of inventory management techniques?

As Inventory, management thereof, costing, logistics, staffing, etc. has become like many other aspects of business more complex and the containment of cost ever so more important, who at your business is in charge? Is it the CFO/Controller? The COO? The Purchasing Manager, Logistics? Warehouse Manager? Someone else? And of course why?


Luis Diaz
Title: Sr. Cost Accountant
Company: Aspen Surgical PR Corp.
(Sr. Cost Accountant, Aspen Surgical PR Corp.) |

In our company, the Materials/Logistics Manager is in charge. In Finance we monitor all the adjustments, transactions, audits, and prepare the final reporting to corporate and auditors. Materials/Logistics department handle all the movements and day to day activities.

(CFO/Board Advisor) |

It was the CEO at the best managed companies I have worked at. For tangible product centric companies, "ownership" and management of inventory is truly a Team dynamic. All areas must contribute to the "ownership" and management of inventory. There are just too many conflicting (adversarial?) points of view which require a single decision. Often "peer" level individuals do not and cannot solve these. The "Court of Appeal" (the CEO) needs to get involved and decide.

Sales must provide timely and reasonable forecasts of sales, that operations or purchasing can build or buy too. Operations (purchasing, materials, manufacturing) must see that they have the right inventory and quantities on hand at the right time, e.g lead times and production schedules. Engineering must design the product customers want, not the one they want to design and manufacturing wants to build. Materials needs to be open and responsive about slow moving and excess inventories. Also, all need to pay attention to what's on order, not just what's on hand. And, of course Finance can assist with costing, reporting, and the like.

As a CEO I worked for used to say: "There is no business, like no business." Inventory management should be one of his primary concerns.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I have an Inventory Control Specialist and we have a dashboard we use to measure areas that can get out of hand quickly and go through any issues/concerns in our weekly meetings.

Mark Perry
Title: Business Turnaround Partner
Company: Optimal Edge
(Business Turnaround Partner, Optimal Edge) |

With inventory typically being the largest piece of the working capital pie, I prefer finance to make most of the valuation, adjustments and reserves decisions. CEO can over-ride of course, but the net valuation of inventory should be no more fluid than cash or A/R.


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