Aligning working capital to customer experience will maximize your bottom line.
Distributors are facing forces of change that range from non-traditional competitors like Amazon to technology to human capital to customer experience. Changing the way you go to market requires new ways of thinking, innovative business models and creative leadership.
While creating a new business model, your business must standardize your traditional business model of multiple stocking locations. The crux of distribution is optimizing working capital while maximizing profitability—known as the service versus cost trade-off. Managing working capital effectively decides the financial viability of your firm. It’s very important to understand the role of working capital not only for your existing business model, but also for the evolving new models of e-commerce and other digital platforms. Until now, distributors lacked a proven and tested strategy to perform the advanced, must-do analytics on this trade-off.
This study, based on 15 years of proven and tested research with distribution firms, reveals the fundamentals and contemporary practices to help your business design the role of inventory within your firm in this era of ever-evolving new business models. This book presents an inventory management framework, customer service metrics, a step-by-step implementation approach and a series of real-world distributor case studies. The framework not only distinguishes inventory at the SKU level, but also provides a blueprint for extending it to demand forecasting and replenishment. It concludes with a plan-of-action roadmap that provides the how-to for implementing the inventory management framework at your company.