Consumer products companies in the USA reduced the length of time that they hold stocks from an average of 45 days in 2008 to 37.8 days in 2012. This change is not just restricted to America.
In Turkey, over the last five years, Sarkuysan has reduced the length of time that it holds stock by 100 percent. Turkcell Superonline has recorded a decrease of 89 per cent, Dardanel a decline of 67 per cent and Yeşim Tekstil a fall of 57 per cent. What lies behind this astounding change is a cost-focused approach.
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Many companies around the world are aware that the rules of the game have changed when it comes to stocks. For example, this is the reason that Wal-Mart became the retailing leader in the USA. 15 of the 21 companies which participated in our survey by sharing data have reduced the length of time that they hold stocks. The company that has recorded the greatest decrease is Sarkuysan, which is a major player in the copper electrolytic copper sector.
The company’s board chair Hayrettin Çaycı says: “The global crisis five years ago had a very severe impact. Today, the problems that the sector experiences in securing raw materials means that the length of time that stocks are held is virtually zero.”
IS THERE AN IDEAL TIME?
So how long should different sectors now hold stocks? The answer to this question varies in every sector. For example in the small household appliances and jewelry sectors the ideal time is now “0” days. In frozen foodstuffs and foodstuffs it is 14-15 days, while in packaging, clothing, catering and timber and forestry products it is regarded as 30 days.
Daikin Türkiye General Manager Hasan Önder says that ideal period for holding stocks varies for every product group and even according to the distance that the product comes. “Cutting stock holding times is not always the right decision,” says Önder.
THE ADVANTAGES OF ACCELERATION
Those who can reduce the time that they hold stocks acquire a significant competitive advantage. For example, Mondi Endüstriyel Torba CEO Kaan Özkan notes that by reducing the length of time that they hold stocks they have been able to use their operating capital more productively.
Yeşim Tekstil CEO Şenol Şankaya says that, in addition to causing financial losses through tying up money in the warehouse, holding excess stocks can also result in a deterioration in product quality as a result of them being held in the warehouse and that they also occupy too much space in the warehouse.