Case Study: Inventory Control Program saves Motorola tens of thousands of dollars.
Motorola sells a wide array of products to a diverse group of customers. Dunning letters are used to collect past due accounts for large volume clients
Letters would be generated and mailed in a #10 window envelope. Motorola ordered these envelopes internally and often ran out of inventory delaying mailing out the envelopes. Allegra initially couldn’t match national contract pricing by a nominal amount however other vendor was often late in delivery further delaying letter mailing.
Allegra created spreadsheet calculating average dollar owed ($6k x 8000 letters/week = $48 million a week x .03 interest per year = $27,692 interest/week and pointed out the nominal amount that we lost bid. Allegra created a program to take a monthly inventory and back stock 2 weeks worth of envelopes to guarantee that they would NEVER run out.
Motorola never ran out of Dunning Letter envelopes from that point forward allowing letters to go out on time, reducing receivables average pay time and increasing cash flow.