One of the surest ways to reduce your company’s inventory costs is to use a vendor managed inventory agreement. Success or failure with these agreements is dependent upon strong cohesion between your purchasing department and its vendor base. Delays are commonplace and manageable, but inaccurate information is much more costly and far more damaging. As such, many of today’s enterprises are upgrading their enterprise mobility network with rugged handheld computers, and they’re giving these computers to a purchasing department that must manage an ever-expanding vendor base.
Archive for the ‘Inventory Costs’ Category
Interested in knowing how upgrading your manual processes to enterprise mobility hardware can help reduce inventory carrying costs for your company? Perhaps you are unaware of what these expenditures entail and how detrimental they are to your bottom line. Do you know that your inventory costs are likely driven by two main factors? One is your costs to purchase and hold inventory, while the other is your cost of losing revenue when inventory is not in your warehouse. Most enterprises assume that their carrying costs only pertain to the time it takes to purchase, hold and sell their inventory. The time it takes to complete these steps means companies must invest large amounts of capital in inventory without immediate returns. Equally impactful are the high costs associated with losing market share and sales, simply because your company does not have the right amount of inventory to fulfill customer orders. That comes from inaccurate inventory counts and tracking, which is often the result of companies that are slow to adopt best business practices with respect to how they manage their inventory. However, upgrading your warehouse management practices with enterprise mobility solutions can reduce the impact of these costs across the board. What can you expect from upgrading your inventory processes?
The right supply contract can effectively reduce your carrying costs, improve your vendor relationships and improve your company’s market position. Most Companies don’t take the time to define what their inventory carrying really are. Are you aware of what’s included in these carrying costs and how they impact your bottom line? More importantly, do you use supply agreements with vendors to reduce the impact of theses costs, shorten turn times on material and improve your own product to market lead times? Perhaps you’re unaware of how these contracts work and their ability to streamline your supply chain. If that’s the case, don’t despair! Continue reading “Carrying Costs Reductions with Supply Contracts” »
Do low inventory counts always equate to low costs? After all, inventory is more expensive the longer it’s held and maintaining low inventory levels does help to reduce the high costs of inventory damage and obsolescence. In addition, low inventory also means the company’s is reducing its daily cost of money. However, while a company’s costs to finance inventory can be a concern, a number of companies are surprised to see just how much their inventory costs them when their inventory counts are too low. In fact, an argument can easily be made that a company’s cost to maintain low inventory is just as high, if not higher, than having too much inventory. So how is this possible? More importantly, what are the main cost drivers of a company who maintains too low an inventory count? Continue reading “Inventory Counts, What are the Costs if They Get Low?” »
High Volume Purchases Versus a Company’s Inventory Carrying Costs:
Companies are always troubled by that nagging concern of whether they have too much or too little inventory. It’s this constant struggle that prohibits them from making sound decisions, decisions that could help reduce their procurement costs while providing them with the right amount of inventory at the right time. It’s a balancing act and one that causes many procurement professionals headaches. However, is there a way a company can measure the savings accrued through Continue reading “Inventory – Measuring Savings” »
Have you taken the time to define your company’s inventory carrying costs? More importantly, are you aware of how these carrying costs reduce gross profit and impact your company’s bottom line? If not, then it’s about time you identify your inventory’s biggest cost drivers. These costs don’t merely include the price paid for parts and raw materials. They also include the per-unit freight costs on incoming and outgoing shipments, the costs of inventory obsolescence, inventory damage, ruined Continue reading “What Should Your Company Include in its Inventory Carrying Costs?” »