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The effective management of inventory is a critical success requirement for every company regardless of company size, market place, or supply chain. Many companies struggle in this area which can have a profoundly adverse impact on the overall financial performance of the firm. For other firms, there is a need for “another set of eyes” to evaluate procurement operations with the goal of identifying new systems, processes or procedures to improve order fulfillment levels and inventory turns.
Purchasing and inventory management studies address the following types of questions:
- Are there opportunities available to improve our in-stock position? Are inventory turn improvements available?
- How can we improve our existing purchasing/forecasting system? Are we using our existing system to its fullest extent or do we need a new technology solution?
- What software solutions exist to improve our procurement operations? Are these solutions adaptable to the industry requirements for our business?
- Are we sourcing products optimally? Are there opportunities to reduce the cost of product by sourcing differently and bypassing existing supply chain flow paths?
- Does it make sense to self-distribute certain product lines or vendors rather than moving goods directly to the retail store?
- Are we staffed appropriately for our purchasing operations? How can we operate more efficiently in this department?
- Do we carry too much inventory in certain product lines? Are we making money when we buy forward on deal opportunities? How do other companies compare in our industry?
- How can we improve the gross margin return on investment for inventory?
- How can we minimize forecast error by reviewing supplier lead time variability, inventory balance discrepancies, supplier reliability and quality issues, etc.?
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