My Turn: Profit From the Inside Out

Is there such a thing as profitable inventory? Absolutely. In the current economic downturn, the opportunity to reduce costs lays in your warehouse.



Leap of Faith


In times of economic uncertainty, it can be difficult to take the leap of faith required to realize the benefits that opportunities like inventory optimization provide. Companies instinctively work to preserve their capital and protect cash positions, relying on methods that have kept their businesses afloat through more than one potential crisis situation. These attitudes become even stronger when reviewing technology investments. People have been burned before.


So why does an initiative like inventory optimization merit special consideration? Part one of the answer lies in its ability to generate cost reductions and additional working capital for distribution companies. It's not uncommon for distributors to generate five to 10 times return on their investment in inventory optimization in six to 12 months, and initiatives of this type have saved more than a company or two from Chapter 11.


Part two lies in the feasibility of using inventory optimization techniques in the distribution environment. The process doesn't require major changes in your organization, nor should it impose a significant burden on your business. It's just an opportunity waiting to be taken advantage of.


In the world of distribution, inventory represents both your company's greatest cost and its most significant asset. By taking advantage of the opportunities that inventory optimization provides, distributors can start maximizing the return on their biggest investment.

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