How to Manage Nonproductive Inventory, Part 2
In part one of this blog post, I discussed the three primary groups of nonproductive inventory that can have a huge negative impact on your gross margin and profits:
- Large overstocks on a relative few items: Remember, overstocks can be defined as excess inventory on discontinued or soon-to-be-discontinued items. These are the 10 percent to 20 percent of items that account for 80 percent or more of your overstocks.
- Small overstocks on many items: The other side of the 80/20 rule.
- Too much too soon: "Good" inventory on active items for which you have too many weeks of supply on hand.
Sound familiar? Well, take note. There are specific tactics you can employ to manage nonproductive inventory.
Joe is Vice President of Product Solutions at Software Paradigms International (SPI), an award-winning provider of technology solutions, including merchandise planning applications, mobile applications, eCommerce development and hosting and integration services, to retailers for more than 20 years.
Joe is a 34-year veteran of the retail industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End, LifeSketch.com, Nordstrom.com and Duluth Trading Company. At SPI, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.