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What Is Inventory Velocity?

Understand how Inventory Velocity fits into the supply chain

Inventory velocity is the speed at which products move from the sourcing of raw materials and components to customer delivery and returns. Accelerating the flow of products moving through supply chains delivers a number of competitive advantages. Increasing inventory velocity requires less inventory and increases the response to shifts in market demand. More speed requires fewer touchpoints, reducing transactional friction and the likelihood of costly mistakes. Maintaining control regardless of inventory velocity is important though to ensure a high-speed supply chain doesn't become a runaway train.