Case Study: Inventory Control Program saves Motorola tens of thousands of dollars.

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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

Problem:
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.

Solution:
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.

The Result:
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.

 

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