How Inventory Distorts Cost Information

Inventory is an integral part of every product oriented company, whether it is a distributor, assembler, or vertically integrated production operation. It is normal for otherwise capable business, financial, production, and material management people to make major decisions that are intended to reduce cost that fail to take ALL costs into consideration, and so run awry.

An Unthinkable Turnaround Story

The discussion of Semco SA, in his remarkable book, The Age of the Unthinkable, Joshua Cooper Ramo provides remarkable insights for those interested in the rapid performance improvements required by turnaround work. Semco SA is a truly amazing, break-all-the-rules turnaround. Set in Brazil, in the 1990s, when inflation was running 1,000% /year, in an economy where 1 in 4 companies went bankrupt, and the government had seized 80% of all cash, Semco made some remarkable changes and resumed profitable growth at a 40%/yr rate. We should all know about this one.