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 reconciling these different perspectives is comprehensive transparency across the entire supply chain – from current and projected customer requirements, through production, to the procurement markets for raw materials and primary 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. On this basis, the optimisation potential can be estimated in terms of working capital, supply risks, replacement times, procurement rates and supplier integration.
ROI supports companies with the improvement of their stock management and working capital management by means of an integrated portfolio of tools and methods:
- Immediate program of measures to increase the efficiency and effectiveness of receivables and liabilities management
- Detailed analysis and segmentation of stock levels as well as ensuring comprehensive transparency across the entire Value creation chain
- Analysis of the cash-to-cash cycle
- Optimisation of cooperation with customers and suppliers (e.g. through the implementation of JIT, JIS, VMI)
- Determination of dynamic target days’ supplies on the basis of item classes
- Improvement of prognosis and planning models and the introduction of highly developed software tools
- Reduction of throughput times in all processes
- Change management and project-linked qualification measures to ensure the sustainability of the results achieved