Manufacturing & Logistics IT spoke with Mike Smith, business development director of Clydebuilt Solutions, about how better warehouse control can reduce the level of required working capital, while also having a positive impact on an organisation's share price.
Profitability and effective use of available capital is, and has always been, key drivers for businesses. With this in mind, many organisations have group headquarters tasked with monitoring the effectiveness of their foreign factories and warehouses in terms of the return on capital employed (ROCE) and/or the local share price. But, as Clydebuilt Solutions' Mike Smith point out, lack of confidence in inventory accuracy can lead to excess material purchase; often known as the 'just in case syndrome' and also longer period stock turns. This, he explains, can not only result in costly and unnecessary levels of stock, but also, as a consequence, have a negative effect on the local share value. He adds that this, ultimately, can have a detrimental effect on the organisation's profitability as a whole.
Source: http://www.logisticsit.com/
(Manufacturing & Logistics IT Magazine)
URL : http://www.logisticsit.com/absolutenm/templates/article-wms.aspx?articleid=5720&zoneid=4
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