Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Steve Volkmann with Jeffries & Company.
Steve Volkmann - Jeffries & Company
Good morning.
Ronald DeFeo
Good morning Steve.
Steve Volkmann - Jeffries & Company
I was hoping we might take a little bit closer look at the inventory maybe. So do you have the components of inventory in terms of finished product, work in process, etc.?
Phil Widman
Sure. On a consolidated basis, we have raw material of $657 million; work in process of $433 million; after market parts of $459 million; finished goods new of $622 million and finished goods used of $87 million and a small amount of miscellaneous inventory $5 million, and about $128 million of inventory reserves. The total is $2.152 billion and there’s some other capitalized variances that go into that.
Steve Volkmann - Jeffries & Company
Okay, great that’s helpful; and then just with respect to; I’m kind of struck by your language about trying to reduce your raw materials and supplies, which seems to be an achievement and yet it seems like that should be something you could very quickly and I guess there must be some minimum requirements that you’d take, minimum quantities or something. Can you just sort of get us around why that’s a challenge for you?
Tom Riordan
Yes Steve, this is Tom Riordan. I think there’s a couple of things going on here, that’s very important to understand. One is, there is a fundamental dynamic. We’ve got several businesses on the short cycle side that obviously have been down and continue to be down at the moment, recently stable order rates on AWP and construction, material processing. I think they have made very good progress on reducing inventory in general.
The challenge has been in some of our larger businesses, specifically mining and our large crane business, where those businesses are still performing well and frankly have been adding inventory based on what I call normal seasonal and/or customer demand profiles.
So you’ve really got kind of a tail of two cities here and on top of that we do have, as you can appreciate, just less than a year ago we had numerous commodities that had very extended lead times for specific order placement, as it relates to in some cases up to two years on bearings, extended lead times on gear boxes, on hydraulics, on engines and so on.
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