Organisations that were selling out of inventory in the boom have found themselves with a problem – to free up working capital, there has been a need to run down inventory levels. Of course, this creates another problem – selling stuff that you don’t have is a good way to annoy customers.
It’s time to employ the “80/20 rule”. Concentrate on the 20% of your products that bring in 80% of your revenue and make sure that you always have these products in stock.
You should be able to run down inventory levels across the rest of your range.
Dr Colin Benjamin
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
