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r percentage of those items, and while some shoppers who don't find what they're looking for will postpone their purchase, many others will buy another brand or nothing at all.
What didn't make sense was that a flood of inventory in the system was still not reducing the high level of out-of-stocks. Frequently, in fact, items that were out of stock on the shelf were actually sitting in the back room. Sometimes the excess product would pile up, and just like an overcrowded basement or attic prevents you from finding what you need, stock people couldn't find boxes of Crest or Charmin even when store inventory systems said they were there. There was too much inventory floating around, and yet too often, customers couldn't find P&G products.
And despite best efforts, nothing the company tried could permanently change this trend. So P&G managers began to explore radically different ideas - ideas that were perhaps contrary to the company's strongly held internal wisdom but might help the company find a breakthrough solution.
P&G set a goal: reduce inventory by $1 billion without making the out-of-stocks problem worse.
That was three years ago. Last year, the cost of P&G's inventory was down, and the company anticipates it will drop an additional $600 million this year. What's more, P&G has embarked on a path that is moving the company closer to a system of dynamic manufacturing, dynamic planning, and dynamic replenishment - and closer to becom
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