The “Great Recession,” as it’s now called, has certainly hit every company pretty hard. Demand is down, fuel costs are up and uncertainty abounds. Supply chain professionals understand that today’s fuel surcharges are just part of the day-to-day hassles of managing incoming shipments. Higher freight impacts gross profit margins, and companies are often forced to absorb the losses. However, procurement professionals aren’t just burdened by higher freight; inventory financing is also steadily increasing, this despite today’s historically low interest rates. Unfortunately, if customers take too long to pay their invoices, then a company’s financing costs will increase, no matter how low interest rates are. So, with freight on the rise, and financing steadily increasing, what must your company do to reduce its inventory and supply chain costs?
Archive for May 2012
Can your sales team use its enterprise mobility hardware to reduce the damaging effects of inventory obsolescence? In order to answer this question, it’s important to reflect upon how companies typically view a drastic decline in sales. Most companies would concern themselves with lost gross profit, others with lost revenue, and still others might be more concerned about the company’s declining market share. Still, others would reflect upon the ups and downs of business cycles and rationalize that declining sales are always followed by a sudden increase in customer demand. Unfortunately, few would stop and think about the costs of holding inventory without sales, and even fewer would understand the high costs of holding inventory customers can no longer purchase. However, there are other companies who use the lull in customer demand to liquidate their outdated inventory. More to the point, they use their enterprise mobility solutions as the catalyst to get that initiative going. Therefore, can a salesperson’s rugged handheld computer help liquidate that inventory before it’s too late? Absolutely!
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How does your purchasing department currently manage its vendor base? For instance, does your enterprise rely upon enterprise mobility solutions that empower your purchasing department to better manage incoming shipments of raw materials and finished goods? Or, do you handcuff your purchasing department by asking them to rely upon manual vendor management practices, ones that aren’t live and can’t possibly give your company the kind of up-to-the-minute data it needs to manage its inventory, its vendor’s deliveries, and most importantly, its supply chain? Granted, these three questions are set up to lead you, the reader, into the eventual conclusion that manual processes are problematic and costly, while enterprise mobility solutions are accurate and timely. Well, the simple fact is, manual processes are costly. They are problematic and time-consuming and most importantly, they do make it extremely difficult to manage a vendor base in today’s fast paced business environment. Put differently, if your company is using manual processes, but your competitors are using handheld rugged computers, then whom do you think is better able to manage its supply chain? Bottom line, your company needs to do away with manual processes.