As interest rates increase, what effect will this have on your company’s cash flow? The costs of carrying excess inventory will be increasing as well, impacting your company’s bottom line. [basic-code]™ helps companies identify their unproductive inventory, determine optimal inventory levels and increase their turnover rates. One company was able to increase their turn from 6.0 to 8.2, by acting on the indicators. This represents an estimated 27% reduction in actual inventory resulting in better cash flow and a savings on the interest of carrying that excess inventory plus your other costs.
Forecasting affects more than just the inventory position of a company. [basic-code]™ has helped companies save hundreds of thousands of dollars, across multiple departments, with its Sales Analysis and Forecasting applications.
Here are a few examples:
Corporate Performance – One [basic-code]™ client gained visibility to its inventory performance and reduced SKUs by 50%. This led to a 64% reduction in the cost of inventory which resulted in $1.0 Million in savings. Another client increased its turn from 6.0 to 8.2, reducing their average inventory by $2.2 million! Operational performance improvements, like increased turn, enhanced profits and inventory reduction are results of good Forecasting. These improvements lead to improved cashflow across the company.
While 2018 isn’t even halfway over, NOW is the time to think about planning for 2019 to ensure company goals are met! Inventory is often the largest investment of a company. By working with the experienced inventory managers of [basic-code]™, you can clarify your inventory, analyze and forecast sales, and manage inventory to increase cash flow. With the efficiencies gained by use of our proprietary Sales Analysis and Forecasting Tool, we have helped companies save $20,000 – $1,000,000.
Companies that achieve the holy grail of Inventory Optimization (IO) realize maximum profit by holding the least amount of inventory necessary, while still fulfilling consumer demands and achieving fill rate goals. By matching supply to expected demand, companies reduce the cost of carrying inventory and increase cash flow and operational efficiencies.
A 2017 survey by the Small Business Administration shows that 50 % of small to mid-size businesses fail within five years, and only 1/3 survive more than ten years. This is largely due to a lack of cash flow. It is critical for the business owner to know their cash balance at all times. In addition to the Balance Sheet and Profit and Loss statements, a cash flow forecasting system is a necessary tool for a small business. For companies with inventory, the cash flow forecasting system should include an Open to Buy.