One of the important ways your company is measured is on Return on Invested Capital (ROIC). Achieving a high ROIC requires turning assets into cash. And inventory is an untapped, cash-rich asset.

Of course, whether you are a manufacturer, wholesaler, or retailer, you need plenty of inventory. If you slash it too much and don't have what customers want, when and where they want it, you may lose the sale. That is a gross margin loss and money that does not go to the bottom line.

That is where inventory optimization comes in. It balances inventory and customer service levels to calculate the optimal mix of where to put your cash. Inventory is like any investment. It requires the right mix of risk and return. The risks are locking up cash in too much inventory or losing revenue because of stock outs. The return is rapid asset turnover into cash.

ToolsGroup is helping customers achieve record customer service levels with demand-driven inventory optimization. Our customers significantly reduce inventory and expediting by improving short-term forecast accuracy and correctly setting safety stocks. They employ demand profiling and advanced consumption logic to improve short-term forecasts and remove persistent forecast bias.

Inventory optimization bolts on to your existing enterprise solutions. You just apply the new logic on top of the current one. It's like adding a thermostat or control system to already installed infrastructure. That means inventory optimization solutions go in fast, typically in three months or so.

You can expect fast payback, too - reductions in working capital employed will recoup your investment in 6-9 months. A dollar of reduced inventory is a dollar of cash generated. Cash is also generated from fewer lost sales, which can greatly improve your bottom line. It all adds up to better ROIC and more day-to-day liquidity, based on significant, sustainable improvements to underlying operational efficiency.