Your sales pipeline management is an important part of keeping your supply side costs low. Here is how to determine your company’s purchasing patterns and save money from the analysis.
The Hierarchy of Decision Making
How many people does an order go through before it gets finalized? Is the hierarchy a bottleneck? These questions are the most important to ask at the beginning of your analysis, because people create systems, not the other way around.
Is your company better served with an on demand schedule, or do you gain some leverage from stocking up in an off-season? Check the pricing of your suppliers to see if you can get better prices during certain times of the year, and weigh the savings there against your costs of storing inventory until you need it.
Cash flow is a very important part of business that too few people consider. A net 60 versus a net 30 payment structure can create the difference in payroll during a slow sales season. In general, use good credit to gain leverage for tough times.
Your past success in purchasing should dictate future policy. Are there certain times during the year when you can count on higher sales? Did having an inventory save you from a bottleneck in the past? Go over past records and determine the best pattern for your future through the best times in your past.
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