Ten Ideas for moving excess inventory now!
Tight Lines Edge
Inventory, Inventory, Inventory – Asset or Liability?
Both – right – need inventory to satisfy customers, but too much and no home – inventory becomes a liability.
A lot of companies will financially write-off inventory – taking a P&L hit once that inventory is deemed not useable, or it has no demand or is obsolete.
What to do with all that excess or are you just carrying too much inventory in general.
Here are 10 ideas to consider:
1. Create that hit list – you should have a list of your top excess items – 80/20 rule usually applies – get the top items taken care of, problem is much more manageable. Weekly meetings to review and track progress are mandatory – nothing happens if there is no focus.
2. Return to Vendor – may or may not be an option – but you will not know if you don’t ask – sometimes vendors have outlets you cannot access – like other customers.
3. Product rationalization – cut the unprofitable, slow-moving items from your product line.
4. Customer Rationalization – I know, nobody likes to cull customers, but frankly everyone usually has a few that need to go, especially if they are buying slow moving sku’s or custom designs.
5. Evaluate alternative channels – are there secondary channels that can consume your goods – think e-bay and secondary markets and others. There is a secondary market for many products.
6. Donate to a good cause – take a tax write-off – there are many non-profits that could use what you have.
7. Pricing actions – used widely and often in retail, clothing etc., but not so much in other categories – I know you will take a margin hit but getting something vs writing off 100% of the cost is still better.
8. Special Promotion activities – Can you consume excess by offering it in a bundle with other more fast-moving products. Buy X, get X 50% off.
9. Re-design an existing product to consume raw materials that have same functionality, but technically is a different item. Depending on excess value – this could be a good investment, especially if re-design is relatively straight forward.
10. Cut bait – it might be time to bite the bullet, write it off and dispose of it – even storing the excess is costly – make room for productive inventory.
Resources and Events
Council of Supply Chain Management Professional Annual Conference – If you are a supply chain professional and not a member of CSCMP, I would recommend joining. These conferences can be a mixed bag of good stuff and not so good stuff, but generally find them helpful.
Supply Chain Movement – Supply Chain Movement connects – Great site for supply chain content and useful information.
If you are a small manufacturer or distributor and struggling with inventory planning – SIQ is a great tool to explore.
Jeffrey Porter and I – CMO of Stock IQ are hosting a webinar on March 23rd at 9 am mountain time – 2023 Capabilities you need now to manage your supply cain– Follow me on LinkedIn to get notified – Tim Wise | LinkedIn
Supply Chain News
Supply-Chain Headaches Ease for Many Companies – WSJ
The US Auto Industry Doesn’t Have a Supply Problem. It Has a Demand Problem. | IndustryWeek
Mexico’s Industrial Hubs Grow as Part of Trade Shift Toward Nearshoring – WSJ
Shipping Delays & Freight Cost Increases 2023 | Freightos
Current Freight Rates – February 2023 – TCI Business Capital (tcicapital.com)
Call to Action
What is one thing you can focus on this month to reduce your excess inventory?
Want to dive deeper – I offer a complimentary supply chain discovery session – Use this link to schedule.
Supply Chain Discovery Session