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?
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