We recognize that the key to protecting margins is protecting pricing. And the key to protecting pricing is prudent management of work in process and finished goods inventory. Companies that have become bloated have no choice but to cut price to flush inventory, while companies with the ability to act quickly have the flexibility to maintain pricing, protect margins and ultimately, take market share.
Optimizing inventory requires understanding, as well as the ability to balance three important levers that impact profitability: product and service level management, supply chain planning, and asset and capacity management. At AlixPartners, we undertake a review of product and service level management to understand customer requirements. This way, we gain insight into the real contribution and service provided for revenue generation. Then, a supply chain planning review is conducted to improve the synchronization of supply with demand and minimize both stock-builds and stock-outs. Finally, we work with our clients on asset and capacity management to optimize both production and distribution assets.