Showing posts with label why you lose money without knowing it. Show all posts
Showing posts with label why you lose money without knowing it. Show all posts

Thursday, March 13, 2014

Inventory Revaluation

Inventory Revaluation means that you revalue your inventory to even out the price. This is generally due to 2 different pricing for the inventory.

Why do you need to know this, and more importantly why do you need to do this?
If you do not do this and if you are buying/selling your materials with different prices on every month or every quarter or even every day, chances are that you will either make or lose money. And the best part is, you can't even explain why you make a lot of money, or lose a lot of money at first glance.

Example of items that I believe could be categorized to the below timelines:
Revalue Every quarter: Electronics products such as computers, laptops,
Revalue Every month: FMCG (Fast Moving Consumer Goods).
Revalue Every week: Food, Commodity (coffee, wheat, rice, soy, barley, potato, etc)  & vegetables in a free market. (Driven by Demand & Supply)
Revalue Every day: Gas in a free market, ForEx & Stock Market. (Driven by Demand & Supply)

I have taught the concept of Inventory Revaluation in 5 different companies in Asia. I have used very easy to understand but very clear examples for my sharing/coaching session. For those who are interested, please let me know.

When I worked out my explaining graphics in a nice way, I will write more on this topic. For now, this is just the tip of the iceberg on Inventory Revaluation. The graphics will explain the matter much clearer.

I will also share how to establish a robust Inventory Revaluation Process.

And..... why are we talking about this in manufacturing program management blog?
Well, program management owns everything. Every step that could be taken to avoid losses will be highly appreciated by the senior management.


Stay tuned.....