A CFO Consultant brought two experts with different perspectives together in Atlanta to discuss possible business collaboration. The discussion took many twist and turns and ironically found commonality in a universal area. Inventory helps contribute to the Turnaround experts restoration of a company while supporting the Inventory Management expert’s lifting a company to new levels of profitability and servic
From the Turnaround advisor’s perspective, poor inventory management can be both the source of a company’s financial challenges while at the same time playing a leading role in restoring the company to profitability. Well-managed inventory supports sales growth, market expansion and superior customer service while operating with less cost and capital requirements.
In a turnaround, it is imperative to identify what assets are available to be sold to unlock liquidity for an effective restructuring. If inventory is the focus, the immediate task is to establish how much is on-hand and/or on-order, the market value and how the quantities balance with demand. This exercise uncovers all the practices that have led to the situation including product development, sales & marketing strategies, pricing, competitive advantage and procurement/manufacturing. In most situations the Turnaround advisor will find that inventory turns, the very thing that converts investments to revenue, are well below their optimal rate leading the organization into diminished profitability, losses or liquidation.
On the other hand, the Inventory Management expert focuses on assuring inventory availability by synchronizing inventory with demand. This ensures sufficient stock is always on-hand and the company never accumulates excess inventory costs or causes stock-outs. Moreover, matching inventory to true demand maximizes inventory turns and profits while meeting delivery commitments.
The two experts found that in both situations there is one solution—achieving maximum inventory turns. Unfortunately, the best inventory management practices of the past simply do not provide sufficient functionality in today’s on-demand business atmosphere. Todays’ environment requires an Inventory Management tools that provide current and future replenishment requirements before they occur while automatically considering multiple complexities such as lead-times, credit limits and transportation issues to eliminate stock-outs and excesses.
How we can help?
Our U.S. Army proven cloud-native Inventory Management program eliminates the complexities in assuring inventory availability in the rapid-paced on-demand world. Contact SMcLendon@balancedflow.com to send a file containing current inventory levels and 12 months of history to see what improvements Balanced Inventory will have on your business.