Perform inventory optimisation

Inventories must be critically scrutinized. It would be too short-sighted to cut inventories across the board. Take a close look at what you stock in your company.

The tricky thing about inventories is that no one is responsible for them in companies. Warehouse management ensures that items are stored properly and that items are put in and taken out of storage on demand, but they are not responsible for the volume stored or the composition of the items in storage. Purchasing, manufacturing, and sales cannot assume this responsibility individually either. Inventory optimization must, therefore, result from a team effort. However, these individuals often lack the time to focus on inventory levels.

Instead of losing sight of this important task, it may make sense to assign an additional person to this challenging coordination task. You may be inclined to say no to this suggestion: an additional position? Contrast the cost of this position with the improved delivery availability, avoidable production downtime due to material shortages, and the cash benefit from reduced inventory.

This, by the way, is a position where university graduates can gain excellent insight into the function of the entire operation before taking on a line function, for example.

In many cases, you can strengthen your liquidity by reducing finished goods inventories. In addition, there may be liquidity potential in your semi-finished goods. Finally, liquidity can often be gained by a reduction of the stock of input materials.


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