Reducing inventories is beneficial from the point of view of visibility and reducing costs.
Considering the nature of products in agrifood businesses, it is also beneficial for quality
reasons. These businesses have to deal with specific characteristics of the product and processes
(see also Table 2), such as perishability, with resulting timing and conditioning constraints for
storage, long delivery lead times, sometimes products are supplied from far away or one has
to wait until products are harvested, uncertainty and variability in product quantity and quality,
bulkiness of goods flows, and so on. Traditional inventory management principles, mostly
developed for the manufacturing industries, do not necessarily apply. The main challenge for
agrifood businesses is to match (often uncertain) supply and (often uncertain) demand, taking
care of specific requirements regarding product quality and safety. Furthermore, one has to
keep in mind that excessive inventories in supply chains tie up capital that could otherwise be
used in productive investments. This is an area of special concern for developing countries.