During my tenure as President of a home décor and gift company, I formed an executive team comprised of VP of Product Development, VP of Finance and VP of IT to improve the efficiencies in inventory management. We had an intense focus on effective utilization of our working capital.
Together, we worked through a complete analysis and prioritized the key areas of cash usage. One area we targeted was better utilization of our inventory working capital and the timely flow of that same inventory. It was vital that if we adjusted our inventory purchasing procedures that we do it in such a way that was well analyzed, planned, transparent and absolutely no impact to our customer base.
As a result of that focused initiative as well as other areas of cash usage improvement, we improved working capital by significant amounts over a two-year period without negatively impacting inventory service levels.