The Next Supply-Chain Challenge Isn’t a Shortage — It’s Inventory Glut

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Top Highlights

• worked out agreements with customers that if orders changed, the company wouldn’t get stuck with excess component

• started applying the concept of “Inventory Momentum,”

• In the tech industry, it’s common for warehouses to be full of now-outdated semiconductors and other technology components.

• an inventory glut of high-end electronics components is an expensive problem

• $250+ billion problem in the U.S. alone, according to a 2023 Kearney study

• you only have to consider the seemingly “infinite” demand for electric vehicle batteries or the boom of chipsets that drive AI-powered technology

• Excess inventory can happen at any part of the supply chain

• Demand is never actually “infinite” or fully predictable given technology changes

• reduced incoming materials

• prioritizing customers with a backlog of large orders, they maximized customer revenues

• reduced the total inventory number by more than 10% in just a few short weeks

• leaders must reconsider the narrative of “infinite” demand.

• Every demand spike will eventually end in an inventory glut

• as new industries emerge, prioritize creating healthy ecosystems from the start

• realm of AI represents a major opportunity

• The same is true of the electric vehicle industry.