The Winning Manager’s Playbook

But inventory is boring—I like to do the fun stuff!

Most CEOs and presidents don’t get involved with inventory. They’re usually off creating strategic initiatives, reviewing the “big picture” financial performance of the firm, or doing other such presidential things.

But there’s big money to be found in that inventory. Imagine in the previous example that the firm had debts totaling $270,000. By lowering Inventory Days by 10, from 183 to 173, it could have enough available cash to erase that debt, and the annual interest payments that go with it. And now it could use that freed-up debt capacity for something else, like one of those strategic initiatives.

We have often seen companies that fit this profile closely. Their debts have been equal to ...