Most CFOs already know that slightest increase in interest rates or their WACC could easily increase the inventory costs so high that they would start making a huge dent in the quarterly profits. However, among the rest of the management, the awareness of this vulnerability is not so high – and they are likely to caught with surprise if this eventuality ever happens.
But that is not the only reason people think about keeping inventories in check. There are many other reasons. You can read them in the detailed description below.
No matter what your role in your company is, here a few relevant questions that you need to think about:
- Are our inventories in line with the best practice, or close to the best practice?
- If not, then how far out of line are we and how can we bring the inventories back in check?
- If there something inherent about our supply chain model which is throwing our inventories out of line and how much is it costing us?
- Is our manufacturing network ideal for the customer demand pattern and the current global commercial and supply chain reality?
- How good are our supply chain decision support tools?
- Are people hoarding information or inventory in our company to the detriment of our profitability?
- What strategic decisions were made at the board or executive team level without due regard to their implementability, and how are they affecting our inventory levels?
If you want to know more about the impact of inventory on our business outcomes, and whether this report is for you or not – read the full description below.