How to resolve AdBlock issue? In hard times, profitability can be 'unleashed' by more acute inventory management
By Leon Gettler, Talking Business >>
ONE OF THE BIG issues now, particularly with growing geopolitical tensions, is that businesses are reducing their inventory levels.
Jarrod Adam, the head of production and distribution at for the Unleashed suite of inventory management products, has developed software that keeps track of inventories and saves time through features designed to pursue more rapid growth.
That is something, he insisted, that “cannot be done with manual spreadsheets”.
According to Mr Adam, Unleashed research shows consumer spending and businesses were taking their time, amid all this uncertainty. That is directly affecting the revenues coming in. 
Mr Adam said Unleashed research had focused on manufacturers in a range of different industries that have different dynamics at play.
“We see more traditional food and beverage, personal care type products, the products we need in our homes, they’re still fairly strong,” Mr Adam told Talking Business.
“Revenues are fairly strong, in fact it’s going through the roof for personal care, ironically,” he said.
“It’s more in the industrial machinery, building and construction-type industries, where you’ve got a lot of volume-type products at higher price points, where businesses are not so willing to make capital decisions at the moment.
“They are waiting to see what happens and that’s putting a lot of pressure on those types of manufacturers.”
Inventories contract to free up cash
Mr Adam said these businesses were currently contracting their inventories to free up cash, similar to what happened during Covid-19.
On other hand, he said, the Unleashed report showed lead times from when a product is ordered to when it comes in have contracted sharply. That metric has reduced from 25 to 16 days.
“What we’re seeing there is a lever that these businesses are definitely using where they’re running leaner stock on hand but have greater confidence than they had during Covid times to get stock in quickly,” he said. 
On the other hand, Mr Adam said, geopolitics had driven up costs. Businesses could not control that.
“The only way (to regain control) is the way they interpret it – they analyse their stock,” he said.
“They’re the businesses that understand sometimes hundreds of thousands of stock lines. They understand which are the higher revenue-generating stock lines,
“They take a more sophisticated strategy to their stock so they will be lean in some of the low volume, low revenue generating lines and really make sure they have more buffer in the more high revenue, high volume products that they’re selling.
“Obviously the fundamental there is you need to understand those two differences across lots and lots of lines and take that approach.”
Challenges in managing the right revenue-generating stock
Mr Adam said with each new financial year, manufacturers had to review their inventories and understand whether they had been carrying enough of the right sorts of revenue-generating stock
“I’d argue that it’s always on task,” Mr Adam said. “As soon as you’ve taken a sale or produced a product, you’ve got a different dynamic.
“So keeping on top of the constantly changing dynamic of your inventory is critical at whatever point of the year you’re in.”
Mr Adam said manufacturers struggling with inventory included the industrial-type sectors such as, industrial machinery, steel products and swimming pool pumps.
That means higher costs and higher price points, and lower volume, sees businesses and consumers making the decision to wait for the moment.
“They are typically higher cost and higher price points and lower volume type products,” Mr Adam said.
“And (increasingly) the decisions made by businesses and consumers is to wait at the moment. They’re being cautious, they’re waiting to see what happens with energy prices rising and costs rising.” 
Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness
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