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