Dealing with slow moving and non-moving inventory

Giving life to the dead stock and moving the non-moving inventory

In any business, inventory in finished goods reflects the fusion of intellectual property, associated technical expertise and its management proficiency. Inventory in finished goods is one of the biggest assets of any business. The turning of finished goods inventory to cash is the crucial part of working capital cycle of any business. The inventory in raw materials and work in progress is equally important part of the business as it facilitates the creation of the finished goods. But, the very same inventory, be it raw materials, or work in progress or finished goods, can easily turn into a liability when it is slow moving. Slow moving inventory ties up the business capital and absorbs the resources that could have been otherwise used for the growth of the business.

Slow moving inventory reflects the merchandise that is unable to move out of the company’s business for which to has been produced or procured. They are typically defined as Stock Keeping Units that haven’t moved out in 90, 120, or 180 days.

Reasons for the accumulation of slow moving and non-moving inventory

The problem of excess, unused, slow moving and non-moving inventory (Inventory defined here as, finished goods, idle plant and equipment, raw materials & work in progress and MRO spare parts) at majority of the business can be attributed to two main reasons. 

• The financial crisis of 2008 has caused a significant economic downturn. There has been a marked shift in the demand patterns across the developed countries. The fall in demand across the developed countries has been a cause of worry for the Industries concentrating on those markets and thus has accentuated their inventory base. The unused inventory did not have the demand to move out of the Business, thus making it slow moving or non-moving

• Technology has also contributed its part in this cause. Owing to rapid changes in technology, certain industrial parts used in the initial device configuration do not find an application in the newer versions of the devices. In some cases, even the industrial device becomes obsolete due to adoption of another device. The business that has produced the old industrial parts/devices in excess has to face the issue of handling the excess unused inventory here. Similar fate rest with the business which has ordered the industrial parts/devices in excess

Dealing with excess, unused, slow moving and non-moving inventory

The world isn’t flat and the same applies to technology and demand. If a certain technology is outdated in one part of the world, the same needn’t be outdated in every part of the world. Similarly, if one product doesn’t have demand in one part of the world, the same needn’t be the case all over the world. Both technology and demand are geography specific.

Goospares uses the above concept and attempts to provide a solution to the business having excess, unused, slow moving and non-moving inventory.  Goospares is a new business which will use the web to bring the sellers and buyers of unused, slow moving and non-moving items that are held as stock for long time by the business. Since, the demand and technology is geography specific, Goospares would ensure that slow moving and non-moving inventory find an avenue to move. The global presence of Goospares along with the subject matter expertise which it has got across multiple industrial verticals would ensure that it gives life to dead inventory.

www.goospares.com would provide more insights regarding this service.