Better Inventory Management
Stock – a Great Un-wanted Asset
And… what we can do to help
Discover the benefits of greater profitability as a result of our improved Lean Inventory Management Review. CLC will review four key problem areas in your business and report back to you on:
- Stock Reduction Opportunities in terms of cost saving
- Space Saving benefits of Stock Reduction
- Implementation Time Frames to achieve the desired reductions
- The CLC Stock Reduction Strategy will provide a finely detailed program for implemention, providing you with a better inventory management outcome.
One key element in creating a successful and highly profitable company is by implementing and maintaining tight control over inventory levels. The secret is in maintaining enough inventory to provide a high customer service level while simultaneously keeping less inventory than your competitors, with the attendant reduction in costs.
Keeping Inventory Costs under control
While inventory is the largest asset many companies have, it unfortunately consumes space, gets damaged, and/or sometimes becomes obsolete. Maintaining a large inventory does not, by itself, create value for customers. But for many companies, inventory is a necessary element of the 
business cycle and must be carefully managed.
We find that many companies underestimate the cost of carrying inventory. Calculating the carrying costs based solely on the borrowing cost of money alone will generally provide a misleading result. Other factors can easily outweigh this cost. In particular, the major costs of high stock levels include increased rent expense, higher handling costs, greater product damage, frequent product obsolescence, and delays in noticing quality errors. For many products, this annual carrying cost of inventory is generally 20 - 40% of the materials cost.