Inventory is a two-edged sword. You can't do business without it. Yet if you do a poor job of managing your inventory, you may not survive with it.

A central focus of this issue—and indeed of supply chain management—is how to manage your inventory successfully. The challenge, addressed eloquently by several feature articles in this issue, is simply this: To have sufficient inventory at the right place and at the right time to meet customer demand without incurring inventory-carrying costs that make you noncompetitive.

That challenge is addressed inside from several different perspectives. As Jeff Metersky and J. Michael Kilgore of Chainalytics LLC point out in their article, there's a strong technology component to meeting the inventory challenge. The consultants lay out a four-part approach to more effective inventory management that begins with root-cause analysis to identify the sources of any problems and then proceeds through the application of sophisticated technology to remedy those problems.

Outsourcing is another element in the inventory mix. Having a third-party provider manage some—or even all—of your product flow might result in lower inventory costs. But as industry veteran Cliff Lynch notes in his piece on "Why Outsource?" you have to carefully weigh these savings in the context of total supply chain costs and service levels. Outsourcing may be right. But the only way to know for sure, says Lynch, is through a careful cost/benefit analysis of this option against others that may be available.

When it comes to inventory management, one company is widely considered to be at the head of the class. Dell Computer's direct-to-consumer supply chain model has helped the company post inventory turns and related market-share gains that are the envy of enterprises everywhere. Technology plays a big part in this success story. But as our feature article by educators John T. Mentzer and Brian Fugate underscores, the real foundation of Dell's success lies in its DNA—two interconnected strains of culture and processes that consistently produce superior results.

"Inventory is evil" was the mantra we heard often a few years back. A more accurate take on this classic bit of hyperbole, might be something like "Inventory is evil... when it's managed haphazardly or treated as an afterthought." The insights in our October issue should help you keep the forces of evil away from your door.

Innovations: This month we launch a regular feature in the magazine called: "Innovations: New Ways of Thinking about Supply Chain Management." As the title says, it will present new ways of thinking about the art and science of supply chain management. This issue looks at the potential advantages of "branding" your supply chain capabilities, much like the marketing folks do with their products and services.

617-558-4569, fquinn@reedbusiness.com