Jack, you're right of course. Actually, it will be more than $127MM because it really represents the difference in the amount of inventory you are carrying with 8 (current) and 4 (target) days, so the net difference will be 4 days at whatever time it becomes fully implemented. But even if it takes several quarters to full implement that will provide us with incremental accelerating benefits all along the way. Look at it this way. Suppose we have 4 quarters coming up with sequential growth of 15% per quarter. With 8 days of inventory that would require $292, $336, $386 and $442MM of inventory. But lets suppose that over the next four quarters the days in inventory are 7,6,5,4 respectively. That means that $37, $47, $61 and $76MM would be freed up in each quarter compared to capital required for inventory under the current 8 days.
That's why I'm so excited about this. I guess I'm bcoming a lot like Kemble, drooling all over myself when I contemplate the consequences of finely tuned inventory management.
TTFN,
CTC |
