9 strategies to reduce excess stock
Excess stock is an obvious problem in companies You know you have excess stock problems and the rest of the company knows it too . That's probably why you're reading this article right now. However, the first step has already been taken: recognize that you have a problem. Procedures to reduce excess inventory should always be considered one of the most important practices and should be incorporated into the company culture. Unfortunately, not all companies prioritize this issue and incur unnecessary expenses that could end if strategies are carried out to combat excess stock . For this reason, at Slimstock we have grouped together several techniques that will help you with excess stock and that any company can use to optimize its performance. First, let's define the problem. What is excess stock or overstock? Also called overstock, excess stock or excess inventory, excess stock refers to the portion of inventory that is not expected to be sold in the short term.
However, there are some additional types of stocks that we hold for strategic reasons. Therefore, reserve stock, safety stock , etc. They should not be classified as excess stock. Graphic Overstock But let's not lose sight of the main problem: excess stock harms the entire company. To each department and each employee. However, some excesses can be classified as “mild discomfort.” A short-term problem with an easy solution. While others can cost you dearly. Both in immediate performance and future growth. And each problem offers a minimum of three ways to harm Japan Telegram Number Data you. Think of each of them as if you were a boxer with three special moves. Three different blows that can leave you lying in the ring. Wasted investment . Buying the stock in the first place is the most obvious punch, and goes straight to the gut. If we include logistics and transportation costs, the outlay is considerable. Avoidable costs . The punch in the jaw is the maintenance costs.
Think about inventory storage and maintenance. Costs that, in this case, would not be necessary. Lost opportunities . The final blow is the opportunity cost. Your money is inevitably blocked. Even if you are a heavyweight, once your resources are exhausted you can be left without defenses. To further complicate the problem, this stock will be a total loss if the excess product becomes obsolete. Furthermore, it affects fast-moving items (high demand) and slow-moving items (low demand) differently. For high-demand items, it causes short-term cash flow problems, while for low-demand items, it causes working capital and long-term cost problems. New call-to-action Symptoms and examples of excess inventory in your business Excess inventory or overstock is a problem that many companies struggle with. Even retail giant Walmart is suffering from the impact of having too much stock: at one of its North American centers, inventory increased 32% through the second quarter of 2022 due to inflation and supply chain issues. That means there is excess stock in stores. |
