Too much inventory, not enough, or is it “just right”?

Problems:

  • Customers are spitting mad because the right product isn’t in stock and sales are being lost, or
  • Peak season is approaching, and you don’t want to get caught short on product, or
  • Inventory turning too slowly, choking cash flow, delaying payment of people & creditors

Desired Outcomes:

  • Happy customers, right inventory @ right time, revenue growing and improved EBITDA
  • Formally defined inventory levels supported by planned production ramp up
  • Improved inventory turns, cash flow, paying people & creditors

Solution:

  • Execute a Rapid Inventory Diagnostic to quickly identify the problems,
  • Quantify the value of solving your inventory problems to your business and customers
  • Create a value-based roadmap to the desired outcomes
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Case study: Precision Tool Manufacturer

 

Challenge:

Manufacturer below industry benchmark in turns, excessive cash tied up in inventory. Entire portfolio was Made to Stock, compounded by supporting multiple generations of product lines. Needed to increase inventory turns, without impacting customer order fill rates.

 

Action: Rapid Inventory Diagnostic

Findings:

  • 87% of the parts SKU’s average fewer than 25 pieces per month
  • 53% of inventory is in a non-saleable state, tying up excessive cash
  • Slow moving / obsolete inventory defined, categorized and valued

Results:

  • Defined path to improve inventory turns in unlocking $900k working capital
  • $350k program of “Finish what you start” to move to smaller lot sizes
  • $125k “Dialing for dollars” program to move slow moving inventory

Next Steps...

If you would like to learn more about how The M. Ryan Group can create value and measurable results for your business, please schedule a call.