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Tim Walters -- (720) 732-4588 |
Inventory Management Deteriorates by 13% in Q4
Littleton, CO -- Inventory management worsened by 13% in the Fourth Quarter, 2003 over the Third Quarter, according to a study released today by InfoTech Marketing. While the total cost of equipment sales rose slightly, inventory levels ballooned by $215 million, increasing the days of sales in inventory to 48.2 from 42.5. Of the 16 carriers studied, 11 saw an efficiency decline, while 5 became more efficient.
"The Fourth Quarter increase offsets the gains recorded in the Third Quarter, with the days of sales in inventory going back to Second Quarter levels," according to Tim Walters, President of InfoTech Marketing. "This may be partly due to seasonality, and carriers likely will see a decline in the First Quarter."
“Our models show that almost $700 million of cash flow could be generated by carrying only 30 days of inventory,” Walters added. “Even if the carriers with over 40 days of inventory get to just 40 days, they would produce $320 million of industry cash flow. Carriers can attain these levels through a commitment to inventory management, better forecasting, and improved ordering procedures."
InfoTech Marketing is a Littleton, CO based consulting company that assists carriers with inventory reduction. Wireless carriers around the world have used the company's inventory management services.
| 3rd Quarter, 2003 | 4th Quarter, 2003 | ||||||
| Company | Inventory | Equip. Sales | Days Sales in Inventory | Inventory | Equip. Sales | Days Sales in Inventory | |
| (Mils.) | (Mils.) | (Mils.) | (Mils.) | ||||
| Verizon | $401.0 | $893.0 | 40.4 | $432.0 | $927.0 | 42.9 | |
| Cingular | $242.0 | $606.0 | 35.9 | $273.0 | $578.0 | 43.5 | |
| AT&T | $215.0 | $495.0 | 39.1 | $309.0 | $617.0 | 46.1 | |
| Sprint PCS | $367.0 | $670.0 | 49.3 | $377.0 | $583.0 | 59.5 | |
| Nextel | $213.0 | $415.0 | 46.2 | $223.0 | $455.0 | 45.1 | |
| US Cellular | $39.7 | $53.4 | 66.9 | $71.0 | $73.0 | 89.4 | |
| Western Wireless | $18.8 | $41.5 | 40.8 | $30.2 | $49.7 | 55.9 | |
| Centennial | $5.6 | $21.6 | 23.4 | $13.7 | $22.1 | 56.6 | |
| Nextel Partners | $16.3 | $37.1 | 39.5 | $24.0 | $32.9 | 67.2 | |
| Triton PCS | $19.1 | $25.8 | 66.5 | $24.3 | $32.0 | 70.1 | |
| Dobson | $18.4 | $17.4 | 94.8 | $12.4 | $20.2 | 56.4 | |
| Rural Cellular | $4.8 | $9.8 | 44.0 | $8.0 | $10.7 | 69.1 | |
| American Cellular | $3.3 | $4.5 | 66.2 | $3.8 | $15.1 | 46.9 | |
| Alamosa PCS | $6.0 | $14.9 | 36.3 | $7.3 | $19.5 | 34.5 | |
| AirGate PCS | $2.1 | $6.0 | 31.9 | $2.6 | $6.6 | 36.4 | |
| US Unwired | $4.9 | $12.0 | 36.5 | $5.6 | $15.9 | 32.5 | |
| Total | $1,590.2 | $3,372.3 | 42.4 | $1,816.9 | $3,457.6 | 48.3 | |
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