Operating expenses
1. Reduction of expedited freight and costly changeovers / setups
2. Minimization of overhead costs required to plan and execute across all functions
3. Optimization of warehouse space and material transactions
Inventory
1. One time cash inflow for the total value of the reduction. This cash can be used to buy equipment, invest in product development, acquisitions or dividends to owners
2. A recurring cost savings for the amount of inventory reduced multiplied by the inventory holding cost rate (usually 10% to 25%)
Customer Service
Increase in delivery performance protects/increases sales and therefore market share
How quickly can the investment be recovered?
The payback time for the standard InvOpt.com implementation is just a few weeks!
If you require higher IT integration and/or consulting help for implementation and education, you would only add a few weeks to the payback time.
Please click on this link to access an article from Supply Chain Digest on the value of inventory optimization