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Just yesterday, Federal Reserve Chairman Ben Bernanke reiterated that the recession was over. A few days earlier, government data showed inventory levels as U.S. wholesalers dropped to their lowest level in three years. The pace and speed of the economic recovery is anyone’s guess regardless of analyst predictions and economic data. But, combined with the decline in inventory levels, there should be some concern about whether your company is prepared to take advantage of the recovery.

It sounds strange to put it that way, but considering that so many companies slashed their stockpiles which had a domino effect on suppliers and manufacturers, it’s a reasonable point. The phrase “I’ve fallen and can’t get up” aptly describes the situation. A large number of plants were shut down with even more employees laid off over the past 12 months. Getting operations back in place and running again is no small task especially for smaller companies who more than likely will require more capital. With the financial community still in flux, securing capital is difficult, and therein lies the issue.

For many companies, visibility into the supply chain is an ongoing problem simply because they don’t know that status of their suppliers. Finding alternative suppliers will be even tougher depending on the state of the recovery. The bottom line is the arbitrary cuts made during the recession may finally come back to haunt many during the recovery.

Wall Street Journal
“Economic Confidence Rebounds”
September 11, 2009

“U.S. Wholesale Inventories Lowest in 3 Years”
September 11, 2009

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