“Rapid Inventory Rightsizing” (RIR) is an easy innovative program to help companies rapidly rightsize their inventory, freeing up millions of dollars of cash and improving free cash flow (FCF). The program is a remarkably fast solution to reduce a company’s working capital needs and ease the impact of the credit crunch.

Rightsizing inventory is an excellent source of short-term working capital. When the composition of inventory deteriorates over time, a large financial asset is not being used most productively. Managers find that they have too much inventory of items they don’t need and not enough of the items most in demand.

The RIR Program is ideally suited for companies with large inventories not being put to optimal use. By improving inventory targets, companies reduce global inventory levels while still maintaining excellent customer-service levels (fill rates).

Individual companies will find different results from this process, but can typically expect to generate cash of between 10 and 30% of their inventory value, while maintaining the same or improving customer service. The program costs a small fraction of the inventory saved and cash generated.

The program is easy to implement because it requires no changes to the company’s distribution/supply network or technology infrastructure. It consists of three steps. For more information, download the “Rapid Inventory Rightsizing” Executive Brief.