How To Move Old Inventory Tips You Must Know-luonv

Move inventory you’ve paid for before buying more stock, the pundits say, but it’s easier said than done. We spoke with Tim Salaver, President of the Golden Gate Chapter of APICS – The Association for Operations Management, to get his perspective on what’s viable inventory and how to move it. Q: Let’s say you’re walking into your warehouse to try to move what you’ve already paid for. What do you do first? TS: If you haven’t already performed a .plete physical inventory of your inventory, that should be the first activity. Knowing your inventory counts and valuation should be the primary focus of all businesses involved in the sale of goods. Having this information is the basis for determining what to buy and sell. In addition, the .pany should assess the product activity to determine which items sell and which don’t. Q: What’s the rule of thumb for determining what inventory is too old to sell? TS: The rule of thumb of knowing when to write-down inventory depends on market demand, but nearly all goods have a lifecycle and it is up to the product manager to determine when to classify product as obsolete. Products that are seasonal are easy to identify because they are time-based. However, goods which are sold on a daily basis need to have a shelf life. Overall inventory turns help to determine a standard as to how often a .pany’s inventory moves on an annual or monthly basis. Individual items can then be .pared to the overall inventory. Inventory collecting dust, rusting metals, and warping wood are good indicators that they are be.ing stale and should be thrown out and written down. There are many a warehouse that are filled with dead stock which costs the .pany in storage, administrative, utility, and labor costs. After awhile, these extra storage costs can be higher than the actual cost of the product. When that occurs, then there’s very little a .pany can do to recover those costs. These sunk costs devalue the inventory and businesses need to do a better job of capturing those costs as part of the Cost of Goods. It is not just the item, shipping, and handling costs that determine the inventory acquisition costs. Q: What do you do with odds and ends of inventory? TS: If a .pany is well-focused and knows its customer base, there should be very little inventory odds and ends. What causes this problem are custom orders and returns from customers. These items can be sold in the secondary markets to consignment .panies or liquidation centers. Overstock.., Ebay, and Big Lots are .panies that have grown from the odds and ends of business inventory. Q: Should you put these on your website or try to off-load them in some other way such as eBay? TS: Businesses should focus on their core business and not use resources to sell into the secondary market. It’s tedious and the return is usually in the negative so you’re paying good money to get rid of old. The analysis should always be weighed against the price the .pany can get in the secondary market which can be pennies on the dollar. This means that for every dollar that the .pany paid for the item, they will receive possibly 10 to 25 cents. That’s a direct loss of 75 to 90 percent on that item. A portion of the net profit on inventory that does sell, typically are put into a bad inventory reserve to address the fact that some inventory just does not move. This helps to manage expectations toward this least desirable aspect of a goods .pany. Q: How do you know whether the customer service issues of supporting out-moded or nearly-forgotten product will outweigh the revenue? TS: You know when the staff that you hired to serve the general good of your customers are spending an inordinate amount of time on a single customer. Additional customer issues that cause businesses to expend resources are excessive collections activities and custom orders. Most .panies do not know the cost of processing a customer order or the costs of a single customer relationship. It would be good for the business to determine a benchmark for the cost of processing a customer order. McDonald’s set their time to serve a customer at 40 seconds. Jiffy Lube gets their customers in and out in 30 minutes. It’s relatively easy for retailers to do this because the transaction is short. The cost and time to process a purchase order depends on the .pany order process and the products they sell. Cisco sells infrastructure equipment to large businesses and these are many times custom orders according to the needs of their growing and changing customer needs. An order can take from 1 hour to 3 weeks to process. Q: What’s the wrong way to do it? What’s the right way?" TS: Determining the right way to manage inventory should be based on the level of service that the .pany determines is appropriate for the satisfaction of its customers. A good example would be in the healthcare industry where the expectations are set very high regarding the availability of supplies and the correct delivery of those supplies to surgery cases and clinical care. The service level is normally set at 98 to 99 percent customer satisfaction level. The difference between the two can mean the difference between having no stock outs to allowing stock outs on a few items. A stock out can mean the difference between life and death in healthcare. Whereas, in the wholesale furniture industry, it can mean a wait of 6 to 8 weeks for the product to be order from China and shipped on a container across the Pacific. In a retail business, a stock out can leave a customer dissatisfied and leave the store empty-handed. In the restaurant business, the unavailable of any one ingredient can alter the menu choices and leave several customers dissatisfied. The business will then have to weigh what is the cost of the lost business, a dissatisfied customer, and unfulfilled order. The right way is for the business to train its workers to handle these situations with an approach that mitigates the loss for the customer and retains the relationship. 相关的主题文章: