Why wait for your stock to become obsolete or redundant?
The real beauty of our InPlantTM system is that you can sell stock on an ongoing basis when it is excess or slow moving rather than waiting until it is obsolete or redundant. As soon as your forecast takes a dip and you have more stock than you need we can market it the same day. Within seconds we can see your excess stock as a result of us talking to your MRP system (e.g. SAP) and we can market your stock immediately. It is literally live! We have algorithms built in, that use factory lead times and your forecasts to accurately calculate a safe quantity of stock to market. For highly volatile situations we can build in a safety buffer to ensure you do not leave yourself short. If suddenly, tomorrow for example, you get a new forecast highlighting that you need more stock for production, our system recognises the change in circumstance and immediately adjusts the stock for sale.
This system really allows you to work your stock, whilst minimising risk by reducing your excess stock holding. You still have a safety window of, lead time, plus the extra buffer of a few weeks’ should you need it again.
Buyers may be concerned about releasing stock in case new forecasts come in. Forecasts fluctuate and do not remain static, that is a fact. Most companies load new forecasts weekly. If you have sold your excess and a new forecast arrives there should be plenty of time to replenish the stock in time for the new production schedule.
We go to great lengths to understand the unique needs of our InPlantTM clients. We ensure that we understand their business model, including how and when their forecasts come in. We have taken out all the risks and instead, let our clients reap the benefits of a stock management process that works in real time.
Plant Directors do not want to sit on stock that is not forecast for production. There are huge costs tied up here. Typically 10% of a factory's revenue is sitting in excess and obsolete stock!
EMS companies often don't worry about E&O. They believe that it is their customers problem. After all if they ordered stock to meet a forecast that has since diminished, surely no blame lies with the EMS? Even if you believe you can ultimately dump it on your customer it is not good business practice and carries significant risk. It is never an easy conversation going to your customer and saying you have $4.5 million excess that we have accumulated for you, and here is the bill! You will have to jump through hoops to prove that it is their fault and not yours. Some stock will fall back into your lap as it is always hard to prove blame and it will certainly damage the relationship you surely should be nurturing. Avoid these situations by minimising the risk for them and you, whilst profiting from every sale. Customers who use EMS companies move around all of the time. We often see stock moving from one EMS company to another. It is a cut throat business and you need to be looking after your customer.
“The more inventory a company has, the less likely they will have what they need.” Taiichi Ohno, father of the Toyota Production System.
Read our published article further outlining our InPlantTM system.
Contact us today to start reaping the benefits and recovering your costs by using our InPlantTM system when dealing with your excess and obsolete stock.