We offer many Inventory Programs including JIT, Kan Ban, and Consignment. All of these have different results, but each one of these results in reduced on-hand inventory, reduced warehouse space needs (freeing it up for value added manufacturing) and increased inventory turns.
Several of our customers have signed up for one of our Consignment Programs. They have been able to shift several hundred thousand dollars of inventory off their books, send the inventory to us, and increase their inventory turns. We set up shipments, based on your usage, to replenish, but in the main, consignment customers don’t pay until a significant time has passed from when they used the product.
You do the math. If your cost of capital is 15% and if you could free up $200,000 of inventory, you would save $30,000 of capital to be invested in other value added projects. You would also have extra floor space. Your CFO will love you!