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Have You Identified Your Loopholes? |
Your company could potentially be losing millions without you even being aware of it. This could be due to loopholes in the way you conduct your operations or an inefficient system that cannot detect or track these loopholes.
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Look at the stock sitting in your warehouse and shop-floor and you will quickly see that your inventories are your factorys most valuable assets. So, is your factorys process for converting these assets into profit extracting the maximum value?
To be successful in todays market, manufacturers need to have concrete inventory strategies and processes in place and not just stock the correct quantity. Tim Zierden of the FI Magazine suggests a four-part inventory strategy that can help you jump start growth and ensure your inventory is working for you in the form of more deals, more profit, and less waste:
PART 1:
Inventory analysis which consists of assessing every raw material in your warehouse, including those you are accepting in trade and those you have planned for disposal. With thorough analysis, you can identify and maintain the right mix of core and non-core inventory and also determine the optimal turn cycle to prevent inventory remaining too long and increase cost.
PART 2:
A Proactive strategy which should also include best practices for evaluating and appraising trades realistically, establishing a concrete aging plan, and setting a pricing structure that fits your market and region.
PART 3:
Inventory sourcing strategy includes how the company determines how often wholesale stocks are purchased and how trade-in decisions are made.
PART 4:
Inventory management systems which finally help manufacturers implement, maintain, and fine-tune their inventory plans. Manufacturers who use inventory management systems realize quicker asset turnovers and a higher ROI than manufacturers that do not.
By applying these guiding principles, you can identify the loopholes in your system and save on those unnecessary losses that could easily be reflected in your bottom-line.
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Anisha Siddhu 