Zero Inventory

Zero Inventories Philosophy

The philosophy of zero inventories follows nearly the same principle as just-in-time (JIT manufacturing is when the company has an inventory only when the consumer needs the goods. There is no inventory or supplies when consumers don’t need the products).

Zero inventory management can also extend to collaborations with dropshipping companies, especially when a strong marketing brand is involved in between. Typically, the marketing brand finds customers who want a product, places an order with the manufacturer, and the dropshipping company fulfills the order.

The zero stock approach is ideal for any company that has:

• Stable market influence;
• Narrow product range;
• Dependent suppliers with fast-cycle operations;
• High volume manufacturing capacity;
• Consistent, high-quality management.

Zero Inventories Advantages

Just like a JIT approach, zero inventory manufacturing has several business benefits, as opposed to traditional processes. Operational benefits realized by zero inventory companies include:

• Swift flexibility when reacting to market changes;
• Streamlined administration work and costs;
• Optimized production by eliminating waste;
• Better market forecasting;
• Optimized supply chains on the need basis.

Zero Stock Examples

As a production and logistics strategy, zero stock minimizes the need or number of SKUs in a fulfillment center in a bid to cut down operational costs. The best zero stock examples include Amazon, Alibaba, and Walmart, all of which are eCommerce retail stores that take consumer orders online and send them to respective manufacturers via an automated inventory management system.