Many companies store more stock and supplies than financial pros like.
Maybe your inventory levels are higher than you’d prefer right now.
Even if that’s the case, it doesn’t mean you necessarily risk getting stuck with excess stock if business slows down. Or that your firm’s inventory-related costs should necessarily spike.
Here are three ways companies can maintain more inventory and keep costs under control:
1. Cut your lead-times
You can try reducing lead time on one or more of these three fronts:
• supplier lead-time
• transportation time, or
• receiving-cycle time.
Any of these changes might give you a significant, one-time reduction. Talk with Production and vendors about these options.
2. Try merge-in transit
If you ship products from two different locations, think about merging the shipments in transit.
That way the items reach your customer as a single and more cost-effective shipment (for both your company and the client).
If you use multiple carriers like many companies do, take a look at their rates for this option.
3. Don’t buy – transfer
Have too much of a particular product/supply in one area, but not enough at another site?
Encourage staffers to transfer product between locations rather than buying more for a single site.
One caveat: This requires communication! Despite all the new technology at their disposal, employees don’t always share info.
A rewards system for implementing cost-savings ideas (such as inventory “heads-ups” that help everyone) can boost communication. Surveys show workers appreciate small gift cards to shops they like.