Certified Supply Chain Professional (CSCP) Practice Exam

Which of the following is a principle behind increasing inventory turns in lean supply chains?

1. Decreasing product variety

2. Shortening lead times

3. Increasing working capital

4. Eliminating JIT systems

The correct answer is: Shortening lead times

Shortening lead times is a fundamental principle behind increasing inventory turns in lean supply chains. The lean philosophy emphasizes waste reduction, which includes excess inventory. By decreasing lead times, companies can respond more quickly to customer demand and market changes, allowing them to maintain lower levels of inventory. This responsiveness helps to balance supply with actual demand more effectively, resulting in higher inventory turnover rates. Lead time reduction enables organizations to replenish inventory more frequently and in smaller quantities, which aligns with the lean principle of just-in-time (JIT) inventory management. As a result, products can be delivered when needed without holding excess stock, ultimately contributing to a more efficient supply chain operation. In contrast, options such as decreasing product variety or increasing working capital do not inherently contribute to improving inventory turns. Decreasing product variety might streamline operations, but it does not directly address the flow of inventory. Increasing working capital typically indicates tying up more resources in inventory, which is contrary to the goal of increasing inventory turns. Lastly, eliminating JIT systems runs counter to the principles of lean supply chain management, which focus on the timely availability of inventory with minimal waste.