Supply Chain

One of the three essential income generating aspects of your business is your supply chain or distribution system.  It starts with raw materials leading into production.  Then there is the warehousing of part and fully completed products and finally their distribution to the point of sale and, eventually, the customer.  Along with this is the collection of payment for the products you have sold.  We cover these functions in our Supply Chain Profit Lever.


Inventory has a major impact on both your profitability and your cash flow. From the profit viewpoint, if you don't have the right items in stock, you can't sell them.  Therefore you forgo the income that you might have otherwise made. From the cash flow aspect, if you have excess inventory, it ties up cash so your cashflow suffers.  You might have to borrow more and that brings in interest costs as well; which further damage your profitability. This group of Profit Savvy articles offers our distilled wisdom on inventory management for profit and cashflow.