1. Executive Brief
Rapid Inventory Rightsizing
Getting Cash from your Balance Sheet
Cash is a Top Priority
“Rapid Inventory Rightsizing” (RIR) is an easy and innovative program to
help companies rapidly rightsize their inventory, freeing up millions of
dollars of cash, and improving free cash flow (FCF). It is a remarkably fast
solution that reduces a company’s working capital needs and eases the
“Cash is king.”
impact of the credit crunch. -October, 2008
In today’s tightening credit environment, even large corporations are find-
ing capital more expensive and in short supply. To this goal, rightsizing
inventory is an excellent source of short-term capital.
The RIR Program is ideally suited for companies with large inventories not “The meltdown may have been averted.
being put to optimal use. When the composition of inventory deterio- But the credit crunch is not over.”
rates over time, a large financial asset is not being used efficiently. Man- -October, 2008
agers find that they have too many of the items they don’t need and not
enough of the items most in demand. By improving inventory targets,
companies increase cash and reduce global inventory levels while still
maintaining excellent customer-service levels (i.e., fill rates).
“Corporate America is caught between
the credit crunch that has made loans
Big Benefits harder to get and more expensive on
one hand, plus a weakening economy
on the other.”
Individual companies will find different results from this process, but
-September, 2008
can typically expect to generate cash of between 10 and 30 per cent of
their inventory value, while maintaining the same or improving customer
service. The program costs a small fraction of the inventory saved and
cash generated.
“According to our quarterly survey of
Using the experience we’ve gained at more than 150 corporate clients senior loan officers, 58% say that they
in a variety of industries, ToolsGroup can run an instant snapshot of a have tightened lending standards to
large and medium-sized businesses...
company’s inventory and immediately identify the potential savings and And more than 80% say their customers
time-to-benefit. In today’s challenging financial environment, this ability are paying more for loans.”
to move quickly is critically important to our clients. -August, 2008
www.toolsgroup.com

2. Getting There Case Study
The RIR program is targeted at CEOs and CFOs looking for increased “We achieved a 25% reduction in
liquidity or free cash flow, private equity funds wishing to improve ROIC, inventory and 99% service levels …
ToolsGroup let us re-mix the stock in 2
and supply chain executives addressing corporate mandates to reduce
months… Needless to say, our finance
inventory cost while maintaining customer service metrics. people were ecstatic...” - Fortune 1000
consumer packaged goods company
The program is easy to implement because it requires no changes to the supply chain director
company’s distribution/supply network or technology infrastructure. It
consists of three steps: With the help of ToolsGroup, this global
consumer goods company was able to
quickly achieve both higher service levels
First, an immediate rightsizing of the inventory to eliminate the least ef- and less global inventory in a few short
fective inventory and insure profit-generating and strategic products are months.
properly served. Capital is rapidly reallocated to the most financially pro-
ductive areas. Inventories that are not aligned with profits and customer For more than 30 other case studies
service are drawn down. Because this first step can be implemented in a in a wide range of industries visit
www.toolsgroup.com.
few weeks, it can rapidly begin generating free cash flow, often within
the same quarter.
About ToolsGroup
Second, all inventories are adjusted to avoid excess inventory experi- With more than 180 implementations in
31 countries, ToolsGroup offers the most
enced in a slow down, while maintaining customer service levels. As
widely deployed demand-driven inventory
revenues slow in certain product streams, most companies neglect to optimization solution available today. Our
adjust their inventory targets to changing circumstances. While individual customers improve short-term forecast
items will vary, overall inventory requirements are reduced, freeing up accuracy and correctly set safety stocks,
additional cash flow. achieving up to 99+% customer service levels
while significantly cutting inventory. We
challenge you to a pre-sales assessment that
Third, an ongoing review process, either managed inside or outside the
can tell you how much savings potential is in
company, to keep inventory targets aligned with changing conditions and your supply chain.
insure a sustainable process over time.
Visit our web site: www.toolsgroup.com
or contact your local office to learn more.
Five Reasons to learn more:
UnITEd STATES • BOSTOn
1. Proven Success: 150 customers in 31 countries
1 617-263-0080 • us-info@ToolsGroup.com
2. All reduced their inventory by 10-30+% ThE nEThERl AndS • AmSTERdAm
+31 20 561 6410 • nl-info@ToolsGroup.com
3. All maintained or even improved their customer
ITAly • mIl AnO
service levels +39 02 48022810 • it-info@ToolsGroup.com
4. Quick results, even within the same quarter C AnAdA • TOROnTO
+1 416 2195424 • ca-info@ToolsGroup.com
5. We prove it with a full inventory snapshot
SPAIn • BARCElOnA
available in less than 3 weeks +34 93 4125768 • es-info@ToolsGroup.com
UnITEd KInGdOm • lOndOn
+44 (0)207 629 1899 • uk-info@ToolsGroup.com
FR AnCE • PARIS
+33(0) 1 55 68 10 58 • fr-info@ToolsGroup.com
mExICO • mExICO CIT y
+00 52-55-11076238 • mx-info@toolsgroup.com