Issue link: https://www.e-digitaleditions.com/i/774819
Look at every product that has sold in less than three of the past 12 months. Ask: Is this a new stock item that needs additional time to develop a market? Is this a critical item that must be on hand just in case a customer needs it? If so, is the profi t mar- gin great enough to offset the cost of carrying inventory for a prolonged period of time or does carrying this item direct- ly lead to other profi table sales? If the answer to both of these questions is no, liq- uidate your remaining stock. Remember that liquidation does not necessarily mean throwing this material in the dumpster. It means getting as much as pos- sible above the cost of liquidation. Every business is planning (or hoping) for better perfor- mance in 2017. Unfortunately, many companies will fail in this quest. Why? Because they are looking for a quick fi x rather than a change in corporate culture. Like any perma- nent improvement in your life, meaningful change only occurs when you implement a fundamental change in the way you do things on an ongoing basis. Why not begin 2017 by implementing these best practices that have helped numerous companies achieve the goal of effective inventory management. That is, to meet or exceed customers' expectations of product availability while maximizing your organization's net profi ts. Resolution No. 1: Justify It Justify why every slow-moving item remains in inventory. Most warehouses are fi lled with two things, stock (products your customers expect to be available for imme- diate delivery) and stuff, which is everything else. There are many reasons for stuff to be in your warehouse, e.g., discon- tinued products, returns of non-stock items, what seemed to be good ideas for new product introductions that didn't pan out, etc. Begin the New Year by identifying your stuff and start a liquidation process. This will free up valuable space and generate some cash (even if it is only scrap value) that can be better spent on productive stock inventory. By Jon Schreibfeder jons@EffectiveInventory.com Look at every product that has sold in less than three of the past 12 months. Ask: Is this a new stock item that needs additional time to develop a market? Is this a critical item that must be on hand just in case a customer needs it? If so, is the profi t mar- gin great enough to offset the cost of carrying inventory for a prolonged period of time or does carrying this item direct- ly lead to other profi table sales? If the answer to both of these questions is no, liq- uidate your remaining stock. Remember that liquidation does not necessarily mean throwing this material in the dumpster. It means getting as much as pos- sible above the cost of liquidation. Every business is planning (or hoping) for better perfor- mance in 2017. Unfortunately, many companies will fail in this quest. Why? Because they are looking for a quick fi x rather than a change in corporate culture. Like any perma- nent improvement in your life, meaningful change only occurs when you implement a fundamental change in the way you do things on an ongoing basis. Why not begin 2017 by implementing these best practices that have helped numerous companies achieve the goal of effective inventory management. That is, to meet or exceed customers' expectations of product availability while maximizing your organization's net profi ts. Resolution No. 1: Justify It Justify why every slow-moving item remains in inventory. Most warehouses are fi lled with two things, stock (products your customers expect to be available for imme- diate delivery) and stuff, which is everything else. There are many reasons for stuff to be in your warehouse, e.g., discon- tinued products, returns of non-stock items, what seemed to be good ideas for new product introductions that didn't pan out, etc. Begin the New Year by identifying your stuff and start a liquidation process. This will free up valuable space and generate some cash (even if it is only scrap value) that can be better spent on productive stock inventory. By Jon Schreibfeder jons@EffectiveInventory.com -Don't get emotionally attached to your stuff. Consider any compensation you receive for unneeded material found money. 14 FEDA News & Views