Despite the increasing popularity of lean inventory management techniques, the ratio of stock to output in UK companies has remained mostly static for the past 20 years. In the US, inventories to sales have actually been steadily increasing since the 2008 financial crash:
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This decline in inventory performance should strike business owners as an opportunity. Research suggests there is a positive link between effective inventory management and financial performance, which shouldn’t be much of a surprise. Lean inventory practices may not be right for all, but companies that encourage agility across the supply chain can reduce days in inventory while increasing service levels.