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integrating organizational

The head of S&OP at the industrial company added: In many instances when there is government-type financing, the customer asks for something a little different and doesn’t get the government funding. Those things can happen, and depending on the robustness of our customer contracts, we may end up with finished goods that were engineered to order that the customer will never take and will we will never invoice. 

“It depends on our practice of contract management. If you combine bad contract management with customer changes, then you may end up with obsolescence.” 

In a make-to-stock supply chain, obsolete inventory is usually the result of a decision to discontinue a product or a refusal to use alternate channels. In a project supply chain, there is likely no alternative if an order falls through after production has begun. This is yet another reason why communication along the chain to commercial actors is so critical.