1. INVENTORY OPTMIZATION
DATALYNX PTE LTD
info@datalynx.sg
COST
COUNT
MONITOR
CLASSIFY
CALCULATE COST
PER INVENTORY ITEM
PERFORM
INVENTORY COUNT
MONITOR INVENTORY
TURNOVER
STOCK MORE
PROFITABLE ITEMS
OPTIMIZE INVENTORY TO
GROW BOTTOM LINE
Inventory holding costs bottom line
When was the last time your company benchmarked inventory efficiency against peers, against industry
and against Industry leaders? Inventory is one of the critical components that can add to costs and freeze
up free cash
The typical inventory holding costs are:

Inventory Damage While Poor handling and Storage methods lead to damaged
Products in a warehouse, the longer inventory is held, the more likely it is to get
damaged.
• Inventory Storage Whether you own or lease, you are paying for warehouse space.
The more inventory you have, the more warehouse space you need.
• Inventory Obsolescence Products forecasted by sales that are no longer required
•
“Every Dollar saved
within the Supply
Chain goes directly to
the Bottom Line”
due to obsolescence. Such Dead Stock is often sold at a discount or scrapped – a cost
that is often hidden or ignored.
Inventory Shipping If inventory is not available you must pay for expedited orders and rush shipments to your
customers. Employees need to arrive early or stay late to meet customer demands due to a lack of inventory or late
deliveries.
 Cost of Capital This is the ‘Lost opportunity cost’ which is the return that could have been obtained if the capital
had been invested in anything other than inventory.
These little inventory costs that occur daily and weekly add up over time, and at the end of the year, these “little”
costs can have a substantial effect on the bottom line

2. INVENTORY OPTMIZATION
Monitor Inventory Turnover and
free up Cash Flow
• Setup Metric and Monitor
DATALYNX PTE LTD
info@datalynx.sg
Tips to manage
Inventory
Setting up and periodically monitoring Inventory Metrics like
Inventory Accuracy, Inventory Turns, Inventory Quality Ratio
will not only measure our performance but will also help us to
be proactive about managing our inventory investments.
• Inventory segmentation
Conventional inventory segmentation techniques such as ABC
analysis or other methods to group inventory based on Physical
attributes can be used to apply common inventory policies for all
the items in a group.
• Collaborate with suppliers
Effective communication across all the suppliers is crucial to
optimizing the efficiency and accuracy of the Inventory.
Visibility across the operations of the Suppliers can help to
pinpoint transactions and activities needed to ensure supply
continuity.
• Optimize safety stock level
Predicting an optimal amount of safety stock for varying
customer demands is a critical component in balancing an
operation’s inventory system. Widely accepted methods like
Reorder Cycle methods or Reorder Point methods can be
configured.
• Centralized inventory Management
Real time Inventory visibility for on hand as well as pipelined
Inventory is of utmost importance for checking inventory
availability, based on which either order confirmation or
sourcing decisions can take place.
• Work with Suppliers
• Monitor with accurate
metrics
• Reduce safety stock
level
• Segment inventory
based on customers,
profitability, supplier