Over 15 years of inventory management experience
In tough economic times, companies look to free up cash and leverage working capital management. Equazion enables you to analyze and assess your inventory working capital performance with comprehensive analyses resulting from more than 15 years' experience in supply-chain management consulting. You need to start from hig-level overviews, screen for potential, and deep-dive to make actionable lists so as to eliminate excess inventory or to review planning policies.
The analyses you will find include - but are not limited to– the following.
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Asses whether the patterns of inventory and demand (valued at cost) are aligned.
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Analyze the working capital turnover across multiple business dimensions, such as stocking locations, product lines, planners, product lifecycle and inventory status. Combine the inventory performance with margin and revenue information.
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Evaluate the performance of fast- and slow-movers. Define your thresholds of weeks on hand and get a high-level estimation of the excess inventory value. Click through on the classes with highest inventory coverage to get the list of item-warehouse combinations to work on.
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Benchmark performance of warehouses, product groups, planners and any other dimension.
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Include the cost of working capital requirements into your customized profit waterfall to analyze the real economic value added.
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Evaluate the obsolescence risk based on demand characteristics as lumpiness.
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Assess the relation between the broadness of your product portfolio and the cost of holding inventory.
Assess your inventory from a broader perspective
You can take a next step by evaluating whether you can change the decoupling point and serve your demand based on a customer order rather than keeping the product on the shelf. Equazion will help you review your planning policies, based on various parameters as the pareto on margin, customer importance, number of customers, number of orderlines, relative margin and others.
Assessing the inventory management might lead to questioning the broadness of the actual product portfolio. Equazion allows you to evaluate what inventory working capital you would save and how different scenarios for product-portfolio rationalization would impact on your market/service offering.
The cost of your inventory working capital should be in balance with other metrics such as customer service and forecast accuracy. In the Equazion scorecard, you can monitor your inventory performance and link it for each possible level (stocking location, product line, planner, SKU, etc.) to those other related metrics.
