Answer to Question #232629 in Marketing for Natania

Question

Water and rocks analogy considering a manufacturing company. three pictures are provided and explain the river/water and rocks analogy where the ship is the company, the water is the inventory and the rocks are the problems

Answer 1

• When inventory levels are low, quality issues are readily apparent. For instance, if the water in a pond symbolizes inventory, the rocks indicate potential issues (machine downtime, scrap, vendor delinquencies, work in process queues, change orders, engineering design redundancies, inspection backlog, paperwork backlog, order entry backlog, decision backlogs, etc.)

• A high level of water (inventory) conceals the rocks (issues) beneath your ship so that they are no longer visible and do not obstruct your ship's (company's) ability to sail smoothly.

• Management may believe that everything is okay, but when the waves recede in an economic slump, issues reappear, posing a threat to the entire organization.