Struggling with Inventory Performance? Stop Trying to Please Everyone and Get a Fresh Perspective
Managing inventory performance often seems like a never-ending battle between the separate departments of your organization. Despite its obvious definition, inventory means something different to the people in each department. It’s easy to see how that can be — each one has distinct goals and wants to make their work toward achieving them as simple and effective as possible.
For example, commercial teams such as sales and customer service will want as much inventory on hand as possible to ensure they have goods to pull from to maintain high levels of satisfaction and service. But as you know, more inventory means more money tied up in goods that are just sitting there, tying up space and working capital, potentially costing interest fees and not earning money until they move.
Operations teams are efficiency-focused — pushing supply chain, purchasing, and material resources teams to acquire inventory intelligently so as to keep costs down. This sounds great — until inventory starts to run low, orders get delayed, and customers get antsy (all three of these require time to address, or expedite actions costing you even more).
Then we have finance, which wants as little inventory as possible to better utilize working capital. Their aim is to keep costs down so capital can be allocated elsewhere. But just like operations, too little inventory opens the door to another set of challenges.
So how can your organization establish the right level of inventory to help each department focus on what it needs to do (and hopefully stay out of your inbox so you can do the same)?
In the presentation below, delivered by River Rock Advisors partner Gary Jones, we discuss why the focus shouldn’t be on satisfying these groups, but instead on achieving an optimal balance of three dimensions to get a better picture of your inventory — and how to do it. Fill out the form now to get started.