The Simplest yet Powerful Business Habits Newsletter
One for Thinking
Looking at the excess inventory, ask yourself these basic questions: I have given some major reasons for you to think through
- What influenced me to purchase this inventory in large quantities, resulting in excess inventory?
- Suppliers discount
- Supplier minimum order quantity
- Wrong forecast etc.
- Why are these products not selling quickly?
- Customer change in Preferences
- Product life stage comes to end
- Seasonal change
- What actions can I take now to generate revenue from this excess inventory?
- Cross selling
- Re-distribute
- Liquidate
- Recycle
One for Action
Categorize the products into the four types as explained in the below table for taking actions.
| Frequency of Selling | Demand in Volume | Actions |
| Low | High | Seasonal Items, Have Average Stock, Replenish based on Sales Pattern. |
| High | High | Have Maximum Stocks, Ensure No Stockouts. |
| Low | Low | Decrease the stock, Convert to made to order type. |
| High | Low | Have minimum Stock, Fast Replenishment. |
Learn more about the actions to take for excess inventory.
Still have questions? Write to me…
One for Sharing
The policies and decisions made during crisis situations to maintain lean inventory can become standard practices to safeguard your organization’s health consistently. What were those policies dropped after the crisis ends? That can be your life-saver.
Gift this newsletter to your friends, by sharing
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