Inventory is one of the largest investments made by most businesses, yet it is often overlooked. In fact, inventory can often mean the difference between success and failure. Between the lack of experience and the access to appropriate technology, small businesses have not had the tools to make smart inventory management decisions.
That is where ePhiphony Incorporated's patent pending solution, Phitch OC 9.0, comes in to guide small businesses to optimize their inventory at peak financial performance. Phitch is the only small business technology solution to optimize inventory at maximum economic profit. Economic profit consists of four primary components: net income, taxes, capital, and cost of capital.
Economic profit is capable of weighing each business entity type by weighing their capital, which in the case of inventory decisions involves customer level objectives. The customer service level is the dimensionless ratio of the number of orders completed on time to the number of orders placed. For example, 0.97 means that 97% of orders can be filled immediately from available stock. The safety stock quantity (in units) is inventory in excess of forecast demand that is kept on hand to avoid stockouts and to maintain a high value of customer service.
According to a survey of 800 Supply Executives all over the world by Aberdeen typical values can be categorized as follows:
- Best in Class (top 20%) 0.97
- Industry Average (middle 50%) 0.85
- Laggards (bottom 30%) 0.71
The point to stress is that customer service objectives vary and consequently not all inventory is the same. QuickBooks currently does not have the capability to set customer service level objectives other than manual reorder point and build points. Only Phitch OC 9.0 provides a powerful tool to implement customer service objectives for QuickBooks users to give your business a competitive advantage. Best in class companies typically have 9 times the inventory turns of laggards and 2 times the industry average.