Demand and Inventory Planning: How to Free the Cash Hiding in Your Inventory
Manufacturers can learn from retailers how to address a slow cash-to-cash cycle caused by holding too much inventory.
As inventory velocity slows, less cash is available for other uses. The slowing pace of materials inventory often links to the product life cycle, for example:
• New items: New products require new materials, driving higher overall inventory as the manufacturer responds to market demand.
• Declining items: Materials required to make slower moving items can produce a drag on overall inventory velocity.
• Mature items: Global sourcing extends the inventory pipeline, while reliance on volume price breaks and freight economies to reduce landed cost can create high levels of slow-moving inventory.
What can you do about it?
Articulate an inventory strategy, track trends, measure performance of individual items, and deploy corrective actions. Each of these items are elaborated by our Suppy Chain Consultant, John Stewart, in a spectacular article you can read here. He also includes information on corrective actions and how to get started.
John Stewart is a supply chain consultant based in West Michigan. Since 2004, he has helped client teams to design and implement supply chain process improvements in manufacturing, food, retail, publishing, distribution, agriculture, and third-party logistics.
Prior to consulting, John spent 18 years as a practitioner, where he honed his skills as a line manager and project manager in both international and domestic supply chain. He managed trade and logistics in manufacturing and retail, and began his career as an import entry-writer for a customshouse broker in Chicago.
John earned a master’s degree in international management from Thunderbird School of Global Management and a bachelor’s degree in Finance from the University of Illinois.
He will be one of our panelists at the webinar Demand and Inventory Planning: How to Free the Cash Hiding in Your Inventory. Register today and don't miss the opportunity to learn more and get actionable tips! Spots are limited.