How can I justify changing my inventory management approach when we have constraints on capital investment?
The Case(s) for Change
In spite of the fact cash might be a bit tight right now the case for change might still be fairly compelling, including:
|
Opportunity
|
Nature of benefit(s)
|
|
More accurate and appropriate inventory settings
|
For example, add up all the times the product is only ever sold in twos and fours but you have stock levels of 1, 3, or 5. How much inventory is being wasted? Are there gaps in the range where it should have been matched? Are your min-maxes being dynamically adjusted to suit seasons and conditions? You can deploy your inventory investment to better effect.
|
|
Improved product range and reduction in emergency orders
|
Improved staff productivity
Reduced airbag and courier charges
Build reputation for better service and raise margins
|
|
Rapid diagnosis and treatment of ‘excess’ situations
|
Don’t allow excess to build and fester. Use automatic capabilities of micq-if to detect problems and facilitate their speedy resolution. Free up inventory managers’ time from transactions so they can have time to communicate with sales and marketing. Improved inventory utilisation can translate to a more competitive business and better margins.
|
|
More efficient container utilisation
|
Forward planning of container orders so that transport and carrying costs can be optimised in the short and over the longer term.
|
|
Better management of purchasing and rebates
|
Avoid creating excess by over-ordering to fill containers or meet rebate targets. Gain the benefits but not the bad habits.
|
Individually all the potential benefit areas might appear a bit small at first glance. But add them up. 5% here and 5% there can add up to large benefits fairly quickly.
A positive effect on Cashflow
micq-if can be packaged so that you can implement it relatively easily and that means you can start to reposition your business and improve your balance sheet and profitability with an investment strategy to suit. We can help you develop an appropriate strategy that makes sound strategic sense and delivers net benefits quickly. When there is an opportunity to have a positive effect on cashflow, and quickly, can you afford not to investigate the possibilities?