The best warehouse is not a warehouse. Consequently, the reduction of stock levels is one of the most effective levers in working capital management. However, the balance between purchase prices, tied up funds and security of supply must be maintained – which makes inventory management a challenging task. At the same time, the various company functions have competing aims. While the sales department expects a high level of delivery reliability, the finance department wants a low total inventory and the purchasing department has to ensure optimal procurement costs and the right relationship with the suppliers.
The prerequisite for harmonizing these different perspectives is comprehensive transparency throughout the entire supply chain - from current and forecast customer requirements, through production, to the procurement markets for raw materials and intermediate products. Successful inventory reduction projects must therefore identify and consider all dependencies between the individual elements of the value chain as part of a holistic analysis. Advanced Analytics is an important tool for this. On this basis, the optimization potential can be estimated with regard to working capital, supply risks, replacement times, procurement costs and supplier integration.
ROI supports companies in improving inventory management and working capital management through an integrated portfolio of tools and methods:
- Immediate action program to increase the efficiency and effectiveness of receivables and payables management,
- Detailed analysis and segmentation of inventories and ensuring comprehensive transparency across the entire value chain,
- Analysis of the cash to cash cycle,
- Optimization of cooperation with customers and suppliers (e.g. by implementing JIT, JIS, VMI),
- Determination of dynamic target ranges based on article classes,
- Improve forecasting and planning models and introduce advanced software tools,
- Reduction of lead times in all processes,
- Change management and project-accompanying qualification measures to ensure the sustainability of the results achieved.
ROI also offers to analyse the data on a regular, e.g. monthly basis and to provide detailed recommendations for action.