Electronic components are at the core of our daily activities. They power everything we do, from the smartphones that keep us connected to the medical equipment that saves lives to the infrastructure that runs entire cities. Yet, electronic manufacturers are sitting on an invisible mine of losses.
Cracks have shown in recent years. When the COVID-19 pandemic rose, the consumer electronics industry fell. Traditional supply chain models faltered, triggering the global semiconductor shortage.
Vulnerabilities that were theoretical became a reality. Factories stalled due to part shortages, component lead times turned from weeks to years, and losses mounted. For OEMs and EMSs, the lesson was apparent: without strong inventory management, risk increases, margins tighten, and waste piles up.
Today, excess and obsolete (E&O) stock costs manufacturers millions yearly in wasted warehouse space, depreciating components, and sustainability setbacks. As the world recovers, effective inventory management is more critical than ever. With the right management approach, these challenges can turn into opportunities for profit, efficiency, and sustainability.
At Component Sense, we help manufacturers globally unlock value in their inventory through proven redistribution models while cutting electronic waste (e-waste) and boosting ROI.
What Inventory Management Means in Electronics
Strong inventory management balances supply and demand, keeping fast-moving components available, and ensures the right components are available at the right time. In electronics, where obsolescence happens fast, the costs of unmanaged inventory quietly add up:
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Depreciation and write-downs: Components lose value as they age.
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Warehouse inefficiencies: E&O stock ties up working capital and valuable space.
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Sustainability impact: Landfilling unused parts harms ESG goals and brand reputation.
Done right, inventory management delivers:
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Lower costs (fewer write-downs, freed-up space).
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Greater resilience (buffer against market swings).
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Sustainability wins (less e-waste, stronger ESG performance).
At Component Sense, we align your inventory strategy with your business priorities, whether that means reducing costs, improving efficiency, or meeting sustainability targets.
The Hidden Costs of Poor Inventory Management
Before just accepting excess stock as “part of doing business,” manufacturers should consider what it really costs:
- Financial losses: Capital locked in slow-moving or obsolete parts.
- Operational drag: Cluttered warehouses slow efficiency and increase costs.
- Environmental risk: Discarded parts fuel e-waste and damage ESG reporting.
On average, electronic manufacturers hold 10% of their revenue in E&O stock, an avoidable cost that could be turned into profit with smarter practices.
Additionally, many manufacturers underestimate the scale of these costs. For example, the global e-waste problem (62 Mt in 2022) underscores how much “inventory” at the end of a product lifecycle goes to waste because of poor reuse/recycling infrastructure and planning.
Best Practices for Inventory Management in Electronics
To stay ahead of the industry, OEMs and EMSs need to take a proactive approach. Here are the top best practices:
1. Audit and Prioritise Stock
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Identify fast versus slow movers.
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Flag E&O before the value depreciates further.
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Prioritise redistribution instead of write-offs.
Our guide on Managing Excess at Financial Year-End shares practical ways to spot E&O before it’s too late.
2. Use Forecasting Tools
Demand forecasting prevents costly overproduction and shortages. AI and automation can spot trends faster than manual monitoring.
3. Adopt the Right Model
Just-in-Time (JIT) and Just-in-Case (JIC) are two widely adopted inventory management strategies in electronics manufacturing.
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JIT: Low storage, but high supply risk.
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JIC: More safety stock, but higher carrying costs.
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Hybrid: The balance that many electronics manufacturers now prefer.
4. Redistribute Excess Early
Redistribution prevents depreciation and landfill waste. Component Sense offers three flexible models to meet your business needs—InPlant™, consignment, and outright purchase.
- InPlant™: Minimum 100% return of cost price, or more, depending on market conditions. Fully integrated with your MRP to flag true excess early.
- Consignment: Up to 50% return, powered by our network of 4,500+ global brokers. Components get international reach.
- Outright Purchase: A fast, hassle-free solution. We bid on your stock within 24 hours, uplift it with DSV within 48 hours, and pay immediately.
Avoid common pitfalls with our guide to Mistakes To Avoid With Excess And Obsolete (E&O) Stock. Not sure which model is best for you?
5. Track the Right KPIs
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Inventory turnover ratio
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Days in inventory
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Carrying cost of inventory
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Ageing stock reports
Case Study: Corning Inc. Achieves 74% Growth with InPlant™
"We were blown away by the returns, especially early on, when some components sold for more than what we originally paid. It’s not ideal to have excess stock, but knowing you have a partner like Component Sense changes everything."
—Bob Siamro, Operations Manager, Corning Inc.
When Corning partnered with us, they turned their E&O challenge into measurable results:
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74% YoY growth in redistributed stock income
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$1.55 million recouped from E&O inventory
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2.5 million parts redistributed
Sustainability and ESG in Inventory Management
Inventory mismanagement is not only costly, but it is wasteful. Redistributing E&O stock prevents components from entering landfills, reduces virgin material extraction, and supports the circular economy.
With Component Sense, every order contributes to sustainability. We plant two trees for every transaction, offsetting carbon emissions and helping our partners strengthen their ESG performance.
Final Takeaways
When inventory management is done right, it recovers value, drives efficiency, and meets sustainability commitments. Redistribution is the most effective way to manage excess and obsolete electronic components. By partnering with Component Sense, you can:
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Unlock cash from excess stock
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Improve ESG performance
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Build a smarter, leaner supply chain