Empower Business Solutions

Time to Reduce Inventory? Microsoft Dynamics GP to the Rescue

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It isn’t unusual for company executives to demand an inventory reduction.  Cash flow is inextricably linked to what is held in the warehouse—and therefore, when the higher-ups need cash, inventory is often one of the first places they look.

But any warehouse manager can tell you that it is simply impossible to cut a percentage of inventory across the board without severely impairing the customer service and expectation experience.  When clients are accustomed to placing an order and receiving it within a certain timeframe, your inventory reductions cannot affect those expectations, lest your inventory reduction lead to a bottom line reduction, as well.

The first step in making an educated plan to reduce inventory is to determine how much of your stock is earmarked for sale after a six-month period.  Any stock in your warehouse that isn’t expected to be sold/distributed in the next six months can be placed on a lower-priority list.  This list is what you will use when selecting reduction stock.

Next, it is necessary to identify slow-moving products.  If certain products sell fewer than five units over a six-month period, it is likely you can place the excess stock on your list for reduction, as well.

If additional reductions are necessary beyond that, you must prioritize your organization’s products according to sales’ ebb and flow.  Keep in mind that reductions to stocked items that tend to have steady, predictable sales are wiser than those that are erratic and unpredictable.

Your goal to reduce inventory without interruption of customer service and expectation can be made much easier with Microsoft Dynamics GP.  When called to reduce inventory, GP can help you make informed decision, maximize operational efficiency, and streamline processes.

Joe Hasson, Empower Business Solutions a Pennsylvania Microsoft Partner.

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