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44 FEDA News & Views ON TAP POSSIBILITIES Drafting Solutions from Keg to Glass. (866) 327-4159 // www.micromatic.com DESIGN. MANUFACTURE. INSTALL. DISPENSING SYSTEMS FOR BEER, WINE, WATER, AND COFFEE Run the report and this will become your inventory obitu- ary. In order to really turn up the stink factor, calculate the sum of column 5. Don't be shocked if you have a signifi cant amount of money accumulated. Let's just call it job security for some lucky individual to be named later. I will touch on the role of the mortician a little later. Identifying dead products is not an annual event. I recently ran into a software package that recommended running their dead stock report on an annual basis. This is not a good sugges- tion. We need to be far more proactive than this. If we employed this method, we could tack on an additional 11 months of inventory carrying cost to any items that died in February. I need to know what died every month. Make this report a part of your fi rst day of the month routine. The Sting of Carrying Costs Once you have run your obituary and identifi ed the dead items, we need to perform some tasks to help prevent further bleeding. As I mentioned above, we have been losing money on these products in the form of carrying costs. Carrying costs accumulate at an average of 25 percent annually. For example, an item that originally cost us $1.00 will actually end up cost- ing us $1.25 by the time we hold it in our inventory for an entire 12 months. The fi rst task is to shut off the faucet. Turn off the automatic replenishment controls for all the items on the list. We do not want to buy more. Incidentally, the worst thing that can hap- pen on Day 1 of the 13th month is that someone will buy a dead item. All of a sudden, we think there is new life in the product. Out come the shock pad- dles and we are ready to give mouth to mouth to a stiff. Dead is dead. Let the item rest in peace. Change the controls in your system to identify the item as non-stock. The next step is to remove the living from the dead. It is one thing to make an item stink on paper; it is entirely more effective to make it stink visually. Create a dead-stock graveyard. Move all the dead items to your newly-created cem- etery. Don't hide the cemetery in the back of the warehouse. We want it visible. We really want the owner to be able to see all the old money accumulated in one place. It tends to give additional motivation when we see a visual representation of the total problem. Some distributors have added their creative Obituary continued I recently ran into a software package that recommended running their dead stock report on an annual basis. This is not a good suggestion. We need to be far more proactive than this.