Understanding the role inventory plays in financial statements is a critical component of determining the value of an inventory optimization solution. Writing for Supply Chain Digest, editor Dan Gilmore walks through the benefits of reducing inventory, and the impact it has on the Income Statement, Cash Flows, and Working Capital.
In the article, Dan uses an example of a theoretical inventory balance of $1 billion, and what effect a 10% reduction of inventory would have on the business. While Dan's example is large in scale, smaller companies with smaller investments in inventory can relate to the value of optimizing inventory levels.
In fact, our experience has shown that with an inventory optimization solution, many small and medium-sized businesses can quickly reduce inventory by 10-15% and reductions of even 30% are also possible. The first step with reducing inventory is to understand what is driving the performance of this strategic asset. Using this information, we then generate effective stocking strategies to achieve targeted levels of service at the lowest cost.
Want to learn how much cash can be squeezed out of your inventory?
Contact TCLogic to learn more.
Read the full article.
In the article, Dan uses an example of a theoretical inventory balance of $1 billion, and what effect a 10% reduction of inventory would have on the business. While Dan's example is large in scale, smaller companies with smaller investments in inventory can relate to the value of optimizing inventory levels.
In fact, our experience has shown that with an inventory optimization solution, many small and medium-sized businesses can quickly reduce inventory by 10-15% and reductions of even 30% are also possible. The first step with reducing inventory is to understand what is driving the performance of this strategic asset. Using this information, we then generate effective stocking strategies to achieve targeted levels of service at the lowest cost.
Want to learn how much cash can be squeezed out of your inventory?
Contact TCLogic to learn more.
Read the full article.
Powered by Compendium
Comments for Supply Chain Finance Refresher