Intellectual Capital/Stewart 25 -28

26 Victories of information over inventory are transforming business after business

GE Lighting has since 1987 closed twenty-six of thirty-four U.S. warehouses and replaced twenty-five customer service centers with one new, high-tech operation. In effect, those buildings and stockpiles—physical assets—have been replaced by network and databases—intellectual assets.

28 Amazon is, essentially, a catalog—a database—offering access to books held by wholesalers and publishers.

There’s a simple but powerful lesson to be drawn from this catalog of the ways in which knowledge companies use information to beat back inventory: every bin of parts, every pallet of raw material, every uncollected bill, every piece of paper in transit from one person’s in box to another ties up time and money to no useful purpose. It’s “working capital” to an accountant—and driving it out is one of the first ways in which investments in information and knowledge can boost corporate performance.