Unlocking Cash Flow: Revitalizing Stagnant Inventory for a Telecom Titan

Unlocking Cash Flow: Revitalizing Stagnant Inventory for a Telecom Titan

Introduction

This case study focuses on a telecommunication company, referred to as Company A, that has faced challenges with stagnant inventory due to project changes, Minimum Order Quantity (MOQ) requirements, and other factors. These challenges have led to a significant impact on company A's cash flow. UniBetter's commitment to resolving these issues is evident through its strategic approach to managing stagnant inventory and its collaborative partnership model.

Background

UniBetter, since 2009, has been dedicated to assisting OEM and EMS companies in overcoming the hurdles of stagnant inventory. The company’s procurement team, in early 2020, initiated contact with the team leader of Company A’s team specializing in handling stagnant materials. This interaction provided UniBetter with a clear understanding of the EMS team’s organizational structure and shipping model.

Challenges

Company A couldn’t utilize capital for new technologies or any other operational improvements because the capital was tied up in stagnant inventory. This was a financial strain and Company A was unable to quickly adapt to market changes in a timely manner. Company A used the valuable warehouse space to store the excess inventory which increased storage costs. The communication industry evolves rapidly and therefore, the electronic parts become outdated at a higher phase. The risk of obsolescence increased when Company A stored excess inventory. Keeping excess inventory was preventing Company A from adapting to market trends quickly and that was putting them at a competitive disadvantage.

Strategy and Implementation

UniBetter’s strategy involves the continuous development of relationships with its EMS customers to help them sell stagnant materials and revitalize inventory funds. The company’s procurement team displayed relentless efforts to help UniBetter customers sell excess inventory. Their persistence paid off, and by the end of 2020, after several rounds of document reviews and site visits, company A’s EMS team accepted UniBetter and formal cooperation began in early 2021.

Results

Through these efforts, UniBetter became one of the top five electronic component suppliers for Company A within just one year. They successfully resolved over 300 stagnant inventory items for the factory, which significantly improved the factory’s cash flow. To this day, UniBetter maintains a close cooperative relationship with the factory.

Conclusion

UniBetter’s case is a testament to the importance of strategic inventory management and the power of perseverance in business partnerships. The company’s ability to unlock cash flow by revitalizing stagnant inventory serves as an inspiring example for other businesses facing similar challenges. UniBetter’s success story demonstrates that with a clear strategy, commitment, and relentless effort, significant improvements in inventory management and cash flow are achievable.