Primarius Increase Cash Flows

"Without relying on
additional funding, there
is a large untapped potential
to improve cash flow by
improving your utilisation
of the largest part of
working capital held by the business - your inventory"

Increase Cash Flows

Operating cash flow is the best measurement of a company’s financial health. In today’s economic climate the old mantra ‘Cash is King’ has never been more true – without sufficient cash flow a business can fail.

Without relying on additional funding, there is a large untapped potential to improve cash flow by improving your utilisation of the largest part of working capital held by the business – your inventory.


On average, 60 % to 70% of a company's working capital is invested in inventory. Research has found that for most companies at least half of that inventory is slow moving or dormant, tying up large amounts of working capital and producing no return on investment. Even worse this inventory soaks up holding costs, eroding profit, as it sits on warehouse shelves awaiting sale.

The problems caused by slow moving stock are not isolated - even Fortune 500 companies have this concern, typically investing more than their annual profit in their inventory. The real issue is that many businesses do not have any workable plans on how to improve this problem, meaning valuable working capital continues to be poorly utilised. Expert systems are not available to isolate the contributing issues nor are people skilled in overcoming the problems involved.

Primarius OMS Inventory Optimisation software actively works to improve cash flow by enabling the business to increase stock turns and action – and not replenish – unnecessary or poorly performing products.

The untapped potential in using OMS to improve cash flows can be explained by the following information –

         1. Most Operating Cash Flow is tied up in holding inventory

         2. Most Inventory is Either Dead or Slow Moving

         3. The number 1 focus by leading companies to improve working capital
              is to reduce inventory

         4. The top supply chain strategies to optimise working capital involve superior
              inventory management

         5. The Results In Improved Cash Flow by Reducing Inventory are Significant

How OMS Improves Cash Flow

Our Success

Primarius’ OMS Inventory Optimisation software solutions have had substantial success in improving cash flow by enabling companies to increase their stock turns considerably within short time-frames.

Demonstrable Results achieved –

  Inventory Value - Client 1 Inventory Value - Client 2
A combination of the forecast produced by OMS and detailed Pareto analysis enables your business to understand which products produce the majority of sales revenue and margin. Importantly, this same analysis provides the business with significant information on those products which produce little or no margin and are held in stock or are on order.
Sales Forecast 2010-2011

By focusing on the important product and improving their management, the business is able to rapidly increase stock turns. Similarly by understanding which products are not performing, immediate action can be taken to cancel any open orders, clear existing stock on hand and not replenish this product from that point on.

Cash and Non Performing Product

In many businesses the single issue strangling growth is cash flow – not having enough cash to fund the business or to buy new stock. The biggest contributor to this problem is invariably range growth or range proliferation.

Primarius can provide detailed analysis and advice on the impact that having too many SKUs has on cash flow – from the financial impact as well as the operational implications in stocking too many non-performing products. We can provide advice on alternative stocking strategies that enable range to be offered but without adversely affecting cash flow.

Primarius’ OMS Inventory Optimisation solution has proven success in achieving significant inventory reductions, leading to major improvements in cash flow utilisation.