​Inventory Cost Reduction

Inventory Cost Reduction and Inventory Turns go hand in hand.  By keenly focusing attention on our clients’ Inventory Turns*, we are able to help them measure the true cost of their inventory levels.  By increasing inventory turns – yet maintaining or improving service levels – Strategy3 is able to achieve Inventory Cost Reduction.
*Inventory Turns or Inventory Turnover is defined as the ratio which shows how many times a company’s inventory is turned (sold) and replaced over a period of time.  Example: A company sells 360,000 widgets a year.  On average, the company houses 90,000 widgets on-hand.  Therefore, this company’s Inventory Turns calculation equals (360,000) / (90,000), or 4 Inventory Turns per year.
 
Statement of Work
 
Strategy3 led the purchasing team of a Beverage Distributor with $650MM+ in annual revenue to decrease inventory as a Percentage of Revenue from 13.4% to 11.4%.  This decrease resulted in $13.67MM in inventory cost avoidance, while improving overall Customer Service Level from a baseline of 96.7% to 98.2%.