Supply chain analytics have a way of turning into abstruse mathematical formulas and numbing statistics. But there are two simple benchmarks which can provide leading commercial health indicators: CCC and ROCE. These metrics quickly help to recognise specific risk factors and determinants of commercial health across the business.
High levels of slow moving and obsolete stock have a negative effect on these two key performance indicators. SLOB is calculated at zero value in most companies P&L’s, but there is still a stubborn commercial willingness to hold on to this stock which inevitably weighs against these KPI’s, and erodes further value in resource costs just to store the inventory somewhere.
Most companies see this as a distraction, but handled correctly, monetising ‘dead inventory’ in a controlled and safe manner is the difference between continuous improvements and breakthrough thinking.
Parker Lane’s core business is in maximising the value of returns freeing you up to focus on your core business.