As a CFO, you face the critical task of managing sales revenues, operational costs, and working capital. With inventory playing a pivotal role in financial performance, leveraging advanced solutions like GAINS’ performance optimization platform is crucial.
By gaining accurate and timely insights into inventory investment, CFOs can make informed decisions that drive profitability, enhance working capital efficiency, and mitigate risks. By transcending traditional metrics and adopting a financial-centric view of your supply chain, CFOs can navigate the complexities of inventory management and achieve improved bottom-line results.
Working capital has become a critical concern for CFOs in today’s business landscape, where uncertainty and rising interest rates prevail. Inventory management has undergone a significant shift, impacting the delicate balance between cost and revenue creation.
The Changing Dynamics of Inventory
In recent years, the perception of inventory as a “free” asset has shifted dramatically. Excessive inventory sitting on shelves for prolonged periods can cost companies millions. CFOs are tasked with understanding why the company carries excess inventory, tying up substantial capital and hindering profitability. CFOs are now responsible for holding the Chief Supply Chain Officer (CSCO) and Chief Procurement Officer (CPO) accountable for inventory management decisions, an area which they may not have had insight into previously.
Addressing the Working Capital Challenge
GAINS’ performance optimization platform provides CFOs solace by offering a comprehensive understanding of anticipated demand and supplier performance. With this accurate and timely data, CFOs can make informed decisions about inventory investment to maintain a specified level of customer service. By aligning working capital investments with demand insights, CFOs can optimize financial performance and mitigate the risks associated with excessive inventory.
Moving Beyond Traditional Metrics
Metrics like inventory turns detail how often companies sell their entire inventory and give a basic idea of their efficiency. But this metric doesn’t tell the whole story. It doesn’t help you reach your cost, profit margins, or risk mitigation goals. High inventory turns may indicate efficiency, but they don’t reveal if you’re spending too much money on storing inventory or if you risk running out of stock – taking a hit to your customer satisfaction.
A Complete Picture of Your Supply Chain
As the Chief Financial Officer, you play a pivotal role in overseeing sales revenue, operational costs, and working capital. GAINS provides visibility into the entire product journey from raw material to your customer’s hands and gives you a complete picture of your supply chain through the finance filter, helping you understand how each step impacts your bottom line.
Are you interested in learning more about controlling the financials around inventory management?
Request a Demo or Download the comprehensive report “Making the Case for Continuous Inventory Right-Sizing,” by GAINS and Supply Chain Management Review.