Wednesday, June 27, 2018

The Problem: The High Cost of Slow Moving Inventory

No matter what your inventory carrying cost, the bottom 60% of your inventory should be your highest operating priority. Any money or space that you use on this inventory is a negative pull on your overall asset base and operating efficiencies.

On the other hand, the bottom 60% of your inventory, no matter how slow moving it is, is very important to your long range customer service levels.

Getting the most benefit from your slow moving inventory means you have to reduce or eliminate the future cost of having it available.  Accomplishing this requires a change to the environment it resides in WITHOUT interrupting your customer service, sales or profits. 

When you take an annual write off, it is usually a small percentage of your actual slow moving inventory and afterwards there is still a lot of it left on your shelves. While these small write-offs do help, more action is needed to improve the actual day to day operations and the managing of your inventory carrying costs.

Solution: A Well Planned Exit Strategy

A well planned GPS 2-Stage Exit Strategy for the entire list of your slow moving inventory is the only cost effective solution and best practice asset management tool available.
Here is how it works:

Stage 1 - Deposit your slow moving inventory into a GPS Inventory Bank distribution center that is designed specifically to manage long term, slow moving inventory.  GPS will pay the freight to relocate the inventory to their nearest slow moving inventory distribution center. Your only cost is a minimal flat rate fee which provides free unlimited in and out transactions.

Using the Stage 1 program greatly reduces your inventory carrying costs and immediately frees up space in your facilities.

Stage 2 - When you are ready to write off any of the slow moving inventory, GPS will accommodate this requirement by taking ownership of that portion of the slow moving inventory thru its Inventory Bank programs. It’s as easy as a quick email or phone call to move inventory to the next stage.  Plus, now you have completely eliminated all carrying costs on this inventory!

Using the GPS 2-Stage Exit Strategy provides:
  1. Greatly reduced or eliminated inventory carrying costs
  2. Free up space in your facilities
  3. No need to seek out space and set up operations to house slow moving inventory
  4. No more committee meetings trying to guess what to keep and what to purge
  5. No interruption to long term customer service
  6. No resourcing items at a one off inflated price that you purged last year
  7. Maintain your prices without inflation
  8. Maintain gross profits without reductions
  9. Reduce or eliminate production interruption for items needed in the field
  10. Protect your inventory from the surplus market
  11. Easy implementation within your systems. The transition is as quick as you can pick and pack the inventory for transportation. GPS handles all the transportation arrangements

The GPS 2-Stage Exit Strategy is your solution to the management of your entire slow moving inventory.  Contact GPS Inventory Solutions now to learn how to cost effectively eliminate the drain on your operating budgets and to improve your overall efficiencies. 

Call (800) 896-0477