Why do successful businesses seek ways to increase supply chain speed and efficiency? Because the quicker a business gets products to customers, the sooner they turn inventory to cash. More often than not, the key to accelerating supply chain these days comes down to technology.
The Digital Foundation of a Fast Supply Chain
Perhaps the fashion industry feels the need for speed more than others. Many hold the retail chain Zara in high esteem for its rapid inventory cycles. And like Zara, many businesses turn to new technology to increase efficiency, lower costs and speed up their supply chain.
Speed Up Your Cash Cycle
Whatever you sell, a fast supply chain leads to a faster cash conversion cycle. Because it costs money to make products, selling your product is how you recoup that expense. The cash cycle is the amount of time that conversion takes. And as CFO points out, the faster the cash cycle, the healthier the business. As a rule, the longer it takes to convert inventory to cash, the less flexibility a business has in spending the cash it does have. In fact, some businesses borrow to pay to replenish inventory during long conversion cycles, increasing the cost of their products. According to CFO, the best performing of 3,700+ businesses convert inventory to cash in 30 days or less, the worst: 80 days. Because of their longer cash cycles, the latter group spends three times as much to carry their inventory as the best-performing ones.
Integrate to Accelerate
A fast supply chain relies on data about production, inventory and demand. Thus, the more systems you use to manage your supply chain, the more difficult it will be to find the data you need to accelerate your supply chain. For example, take the story of Tailored Brands, a multi-brand custom-fit men’s fashion business. The company uses 22 different systems to manage its supply chain, from production to sales at its 1,500 retail locations. However, it was only after integrating data from all those systems that it was able to cut its distribution center processing time in half.
Cin7: Integrated Out-of-the-Box
Businesses use software and data to optimize inventory for better cash cycles and efficient supply chain management. Cin7 gives companies a single solution that integrates with every step of their supply chain. With automated fulfillment processing, realtime visibility, and comprehensive reporting, Cin7 gives companies the mechanism to build and manage a fast supply chain.
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