There' s not much you can do other than try to convince the customer that it's an undue burden on your company, Poirier says. Turn, turn, turn. Track inventory turnover. Manufacturers' inventories should turn over six to eight times a year. Distributors' inventories should turn over four times a year.
Fewer turns means too much cash is being tied up in inventory.
Tighten up your supply chain. Reduce the number of your suppliers and streamline deliveries so that you receive goods more quickly, book author Stansell says. Skip long-term contracts. Long-term contracts can lock a small business into high ongoing costs. It's a gamble though, particularly with energy.