We talk a lot about importance of inventories in class, and here is another example, this time coming from Tesla Motors. Their sales are up, to everybody’s cheer, but inventory numbers paint a bit of a dimmer story. Their days of supply inventory is growing steadily which could indicate slowing demand for their cars. The story speaks volumes about importance of inventory numbers (to ops folks and investors alike), and their breakdown – while growing finished goods inventory maybe alarming of slower demand, growing raw materials may suggest that company is betting on future growth. In the Tesla’s case it seems to be the finished goods inventory.
Operations Club 351 