Could Resource Scarcity be a Self-Inflicted Wound?  

By Rich Bond

There is great concern today about resource scarcity and interruptions to the supply chain resulting from the pandemic. Many of these concerns are serious and justified.

However, in some instances, companies believe they don’t have enough resources, when they actually do. They have created their own problems by not effectively managing the inventory they do have.

 

Can you turn scarcity into business success?

Here’s an example: A new Controller we placed in an undercapitalized $30 million manufacturing company freed up $1 million in working capital simply by reducing inventories of slow-moving items and making more room for the fast-moving ones. At the same time, his analysis and action streamlined operations by increasing the on-time order fill rate from 85% to 90%, making customers happier. The real bonus is that the cash that was freed up enabled the company to grow sales to $50 million.

This new Controller turned what was thought to be scarcity into business success. If you’d like to explore how your financial management can help your business prosper through better resource allocation, message me on LinkedIn or email me at Richard.bond@bondandcompany.com.

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