What would you do if you had the chance to save $2M per year with no capital expense and a payback period measured in weeks? Nothing?
Have you ever noticed how much time we all spend considering the costs of taking action and how little time we spend considering the cost of inaction? That is, the cost of delayed action.
Recently I helped a company identify an $11.4M improvement opportunity. This involved reducing their inventory holdings across a number of sites, without negatively impacting their operational performance. If the cost of holding inventory is 20% of the inventory value per year, in this case, the annual savings in holdings costs would be $2.2M, each and every year!
So, what is the impact if you then do nothing and delay the execution of such a project?
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