Nine tips for managing your inventory

"Inventory Turnover"

"Inventory Turnover" explains how improving your stock turnover by just one week can improve your cash flow by 1% over the course of a year.

Costs of Excess Inventory and cash flow problems

Excess Inventory, the costs and one possible solution

Inventory Carrying Cost Calculation Vlog

Inventory cost

Here are 5 reasons to scrap your inventory

5 Reasons to Scrap Inventory

Excess or slow moving inventory costing you too much money?

Here are 5 reasons to scrap your inventory

1. You could care less about your brand

2. You don't care if someone needs a part later

3. You don't care about your market integrity

4. You are a short term thinker

5. You don't care if a future production run is needed to supply the same parts later

There is a better way, see http://www.gpspartsmart.com

How to sell excess inventory for MUCH more than market value

Reduce Your Inventory and Find Cash - Part 1 of 5

Inventory Solutions - Why Inventory Banking is a GREAT Idea

It is absolutely possible to minimize your excess and slow moving inventory while maintaining stock levels that are in-line with your corporate supply goals.

The Inventory Bank model offered by GPS Inventory Solutions is customized to meet your specific company needs. This proves to be a very simple and effective way to help your company achieve your overstock inventory objectives.

GPS stores your slow moving inventory in their high-density long term storage facilities where it is available for sale to the manufacturer and its authorized distribution network.

By using this method of inventory control, manufacturers are then able to reduce inventory carrying costs while increasing their available warehouse space for their products that are known to move through inventory quickly.

Customer Service also benefits through increased parts availability and to provide long term support for all of your products.

Unlike other surplus outlets, GPS Inventory Solutions protects your brand identity and market integrity through their Inventory Bank Program.

Additional Benefits:

•     Same Day Shipments Available
•     Improve Customer Satisfaction by Increasing Parts Availability
•     No Minimum Orders – Buy Only What You Need – When You Need It
•     Professional, Friendly Customer Service
•     Free Up Resources To Support More Profitable Activities or  New Corporate Initiatives
•     Easy to Implement Program
•     Possible Tax Benefit Available

  
To learn more about reducing your overstock, slow moving inventory visit GPS Inventory Solutions

What is an inventory bank?

http://youtu.be/Ys2Z1AIs74Q

this video explains what an inventory bank is.

GPS Inventory Solutions

Dallas, Texas, January 5th, 2010 – GPS Inventory Solutions, Inc., also known as GPS, or General Product Support, is a business specializing in, Inventory Bank Solutions and Inventory Management, received national certification as a Women’s Business Enterprise by the Women’s Business Enterprise National Council (WBENC).





http://www.gpspartsmart.com/womeninbusiness.html

Getting rid of OSMI – Obsolete Slow Moving Inventory

Obsolete and slow moving inventory can decrease revenue by between 0.2 and 0.5 percent. Proactive management of the supply chain can eliminate or decrease this loss of revenue. Supply chains can be kept lean and mean so that less and less inventory needs to be written off. The less inventory you write off every year is a sign of proper management of the supply chain and inventory.

Some OSMI are a result of new products that don't sell as forcasted. New product launches should be watched closely by the inventory managers and the finance department. The more quickly you deal with slow moving inventory, the better for the bottom line.

As the recession took hold some companies were able to proactively study the supply chain and identify OSMI. Once identified, there are several ways to manage it, one unique way is by using an inventory bank, whereby you can get rid of the parts from your inventory but still have access to them if and when they are needed for customer service

Supply Chain Terms and Definitions

Inventory related terms:

SLOB – Slow and Obsolete Inventory
OSMI - Obsolete, Slow-moving Inventory

The cost of slow moving inventory

How much is Excess and Slow Moving Inventory costing
your business?

Inventory is a huge investment for most companies and in a recession, holding inventory can become a significant financial burden. Inventory that is not being utilized is creating a drain on your cash flow and ultimately, a negative impact on your corporate bottom line.

What is the real cost of holding onto inventory? Is it 20%, 30%, 40% or more?? Recent studies indicate that in many companies the carrying cost is no more than a guess, or a number given to them by accountants or other sources.

So how does excess or slow moving inventory cost money?

Interest
Interest is paid on borrowed money. When inventory doesn't sell, you are incurring more interest charges.

Taxes
Jurisdictions tax manufacturers’ inventory

Insurance
Insurance premiums cover replacement costs of inventory on hand

Obsolescence/Reserves
Financial reserve set aside to cover losses, write-offs, and shrinkage

Storage Space
Operational and Maintenance costs are incurred every day. If your warehouse is full of slow moving inventory, what will you do when you run out of space? Build or rent more warehouse space to accommodate more inventory? Your slow moving inventory is taking up space and eating up money that could be used on inventory that could be making you money.

Capital Equipment
The cost of supporting hardware should also be considered: forklifts, scales, bins, racks, and automated storage and retrieval systems

Depreciation
Is your inventory depreciating as it sits there month after month?

Time and Personnel
Include Inventory and Warehouse managers, stock keepers, material handlers, cycle counters, planners,and controllers.
How much time are your company's employees spending on your excess inventory? How many man hours are spent looking at the issue, going to meetings about it, trying to figure out the most profitable
way to deal with this inventory?

The bottom line is when you factor in the real costs, the maintenance of excess and slow moving inventory is not worth the negative effect on the profitability of any company. Inventory needs to be moving. The slower it moves, the less money you earn in revenue AND the more money and time you lose from all of these other negative consequences of holding this inventory.

In our next article I will discuss a solution for this excess and slow moving inventory that offers a way to eliminate ownership costs and free up warehouse space while still retaining inventory availability for long
term product support.

It is called The Inventory Bank.

Top 5 reasons why scrapping inventory is a bad idea

1. You are selling it for pennies on the dollar so you are losing money.
2. When the parts are needed, you may not be able to get them to customers in a timely manner and the Customer service manager will understand this is a problem.
3. It can create branding problems which the marketing guy will understand, as the parts may end up being sold all over the place by different entities.
4. If parts are needed and can't be found, you have to do another production run... and now you end up with more inventory.. the inventory you got rid of for pennies on the dollar to free up space.. now you have inventory again...Back in the same place again but poorer.
5. Do you know the other reason why this is a bad idea? If so, please write it below:

Excess, Slow Moving Inventory

Over the past 20 some years of working with distributors, one thing I have found in common with every single one is the existence of dead stock. It is nothing to brag about, but there are some distributors who work with more dead stock than live inventory. There are some who think it is dead and forget about it. Then there are those who like to keep their dead stock around for years on end, almost to the point that it becomes part of the family.

Read more of this article on Excess, Slow moving inventory

Slow-Moving Inventory: All Dressed Up and Nowhere to Go

Some companies that think they do a good job speeding inventory have it only half right. Many focus only on fast-moving items, ignoring the savings potential of managing slow-movers. Here's how to tap this new opportunity.

Read more of this article about Slow Moving Inventory

Manhattan SCOPE: Inventory Optimization

Scrapping inventory, the accounting process

When Scrapping inventory, a debit will be made to the Scrapped Inventory account, with an offset credit made to the Inventory Asset account. 
http://www.fishbowlinventory.com/wiki/Accounting:Scrap_Inventory

Increasing Producity & Optimizing Space

High density mobile storage.

9 Tips for Managing Your Inventory

For a detailed white paper on the 9 Tips for Managing your Inventory please visit www.supplychain.com and download "Managing Inventories with Zemeter."

Modernizing Inventory Management

The original Cole Hardware was founded in 1959 by Dave Karp. Today, his son, Rick Karp has four stores throughout the city of San Francisco. Technology is at the heart of operations for this small business. Karp currently spends 50,000 to 100,000 dollars annually on IT to help optimize and grow the SMB. Correspondent Sumi Das visits the store on a busy day and talks to Karp and his IT manager Robin Miller about how he uses inventory management software and scanners to help catalogue more than 40,000 items, and how theyre using analytics solutions to track revenues.

Spare Asset Management

Knowing that you have appropriate spares for all of your critical items is a necessity. TracRat ensures that you have adequate backups, and at the same time allows you to reduce excess inventory. With the Find Replacement button TracRat allows someone who isnt an expert to identify the appropriate spares and take actions to put those items into operation.

Tutorial - Slow Moving Inventory

Slow moving inventory is often seen as an easy target for people undertaking an inventory review. 

Supply Chain Management Review Whitepapers

http://www.scmr.com/whitepapers

Liquidate All Slow-Moving Inventory?

You want to stock the products that your customers request most often in your warehouse(s). But what about products with sporadic sales, or no sales at all? A recent article (not by this author) suggested that you should discontinue and liquidate the stock of any product that is not sold or used on a regular basis. No exceptions. Clean them all out! Or so the author said.

But do you really want to do this? We don't think so. Most distributors and manufacturers should maintain a stock of some slow-moving products, and even products that have never been sold, in order to maintain a high level of customer service and enhance their corporate profitability. Why?
http://www.effectiveinventory.com/article43.html

What is OSMI and what to do with it?

Obsolete, Slow Moving Inventory shouldn't be scrapped since it is slow moving... but you will need the parts later. This video explains how an inventory bank can help you free up warehouse space while maintaining availability of parts.