How Much Cash Do You Have locked down in Inventory?

In these times when cash can be hard to come by for most businesses it is as important as ever to have an inventory program that gives you as much cash flexibility as possible. Still many companies continue to operate on the “got to buy volume to get best price” mentality. This purchasing path takes a company into Cell Block NEOC – Not Enough Operating Capital.



Why be prisoner to vendors that make you produce in volumes equal to your annual uses? Have you considered your cash is locked into parts sitting on shelves at your facility? What about the parts that you don’ t sell? You know a discounted sale is coming for those bad boys.

When you take into consideration all the expenses related to mass production or high volume buying the payoff really does not make any sense. I mean, if you can buy high volume and move the product that is great. But too many companies are buying too much product because of the imaginary pot of gold at the end of the rainbow.

Think about it – so you pay 25% more per part on a $5 part because you bought 500 pieces instead of 2,500 pieces. That is an extra $625 over the 500-piece lot. Now let’s say that you move 500 pieces in 3 months so it would take you 15 months to move the 2,500. If you purchase the 2,500 pieces then you will lock up $2500 for an extra 3 months, $2500 for an extra 6 months, $2500 for an extra 9 months and $2500 for an extra 12 months. Total cash lock down over the initial 3 months is $10,000. Total lock down over the 1-year period is $5,000. All for $625 per quarter?

How much is it worth to have cash available when you need it? Good night sleeps for 3 months is way more valuable than $625. So what is the solution? Buy in lower quantities. Buy from a trusted supplier that speaks your language and can be reached when you need them. Buy where you are making the greatest impact for your own company and your neighbors. Buy right Here – in the USA. It is the best place to buy!

If you want to get started on your freedom program contact Short Run Pro today and let us show you how short run production can make your business smoother and cash happy. Contact us at sales@shortrunpro.com or 877-829-9293.

Production is Coming Back to the USA

The primary reasons companies have their products manufactured in the USA has always been the higher quality products turned out of factories in the USA and a desire to support the manufacturing base with the United States. The corresponding reasons to order from companies not based in the U.S. is to obtain less expensive parts, thus making one's products more competitive within the market. It is a known factor in importing and a generally accepted principal that lower quality is to be expected in countries where factories depend upon their large populations for cheap labor and therefore produce lower cost parts.

While these opposing purchasing philosophies are still applicable, the manufacturing base in the United States is now realizing other reasons for recapturing production jobs within our production facilities. In recent months, Short Run Pro has seen a greater number of urgent requirements from OEM's and medium sized businesses that had previously sent their production jobs overseas. The explained cause of this shift back to U.S. manufacturing is based upon the following factors:

1. Inadequate Resources
Due to the lack of raw materials and operation supplies within developing foreign economies, production companies in these countries are experiencing significant shortages and higher costs related to these raw materials. This is having an impact on production time frames and in extreme cases is determining whether a company remains in business.

2. Inadequate Labor
The work force within some countries is being greatly affected as the standard of living increases within the respective countries. As workers traditionally exposed to poor and often dangerous working conditions, low wages and few benefits are being exposed to advances that come with booming economies and strong demand for experienced workers their expectations naturally rise. The workers begin to demand benefit and will frequently strike or all together quite. This causes a need to find and train a new workers, which in turn affects production lead times and the quality of the parts being produced. Each time a worker quits a new one needs trained. An unreliable work force makes for an unreliable supplier.

3. Escalating Shipping Cost
Shipping costs have see massive increases over the last 3 years. It seems that as the economy within the USA was hurting its worst, shipping of products from overseas was seeing its most significant increases. Cost of fuel, governmental influences and the decrease in "back hauling" has had great impact on shipping companies. The cost to ship from foreign countries is becoming a large percentage of the entire cost to buy the item. Now customers are finding it easier and more affordable to buy a higher quality, though slightly higher cost, product from a USA-based company, than to buy a cheap inferior product overseas and pay the extensive shipping costs.

All together, these factors make a possible buyer turn from the less expensive production of parts in overseas factories. These buyers, both inside and outside the United States, are finding an excellent alternative waiting for them. An alternative that has been here all along but has been overlooked due to desired lower costs and higher profits. The manufacturing base in the USA is waiting to produce the highest quality products available in the world just for you.

If you want to get pricing from a US based manufacturer contact Short Run Pro at 704-825-1599 or visit our website at http://www.shortrunpro.com.