From the course: Supply Chain Foundations (2014)

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Delivering your product

Delivering your product

From the course: Supply Chain Foundations (2014)

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Delivering your product

- In the old days, companies wanted lots of inventory. Months of inventory meant power: the power to meet consumer demand, the power to quickly expand business. Nowadays, unnecessary inventory is seen as a burden. As a result, warehousing tons of inventory is not seen as practical. Companies rarely utilize traditional warehouses. Today, companies favor using distribution centers. What's the difference? Believe it or not, unlike warehouses that might hold months of inventory, distribution centers typically hold their inventory for less than 48 hours. Yep, for some companies, if an item sits in a distribution center for more than 48 hours, it's considered a logistics failure and for some companies, it's 36 hours or even less. The most common question people ask is, "If it's only going to be there a day or two, "why even take it there in the first place?" Good question. Let's look at a really simple scenario: five suppliers, five retail stores. Let's say the 10 sites are geographically…

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