Financial Guide for SMEs - SME Corporation Malaysia

Financial Guide for SMEsChecklist for Managing Inventory3. Operational IssuesActionDescriptionSupplierserviceAdvertisingandpromotionSalespolicyCustomerdeliverySuppliers can assist in inventory management by providingaccess to inventory only when you need it (called JIT or justin-time)and by providing good delivery service. By orderingless inventory more frequently and arranging better deliveryschedules, you can reduce inventory quantities, savingvaluable cash resources and improving liquidity withoutreducing sales.Before launching a promotion, ensure that you have adequateinventory or can source for adequate inventory. If you havetaken on larger than normal quantities, make sure you have aback-up plan if they do not sell during the promotion.This can have a strong infl uence on inventory levels andshould be managed with a view not only to maximising sales,but also to minimising investment in working capital. This canbe achieved by directing policy towards a higher turnoverof goods, selling goods bought at bargain prices faster, andclearing slow-moving items.Ensuring that goods are delivered to the customer fastermeans the inventory is moved and the cash for the sale willcome in more quickly.51Chapter 2-5 p22-65 Eng.indd 518/15/11 5:01:57 PM