Tips for Managing Excess at Financial Year-End
The end of the financial year, or fiscal year as some call it, can be stressful for electronic manufacturers.
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The end of the financial year, or fiscal year as some call it, can be stressful for electronic manufacturers.
Research by Kearny of the high-end technology manufacturing industry found a 53% increase in total inventory levels between 2019 and 2022. The impact of COVID-19, among other supply chain disruptions, saw top companies in this segment accumulate more than $250 billion in inventory. A lot of these parts could now already be classified as excess and obsolete (E&O) stock.
At Component Sense, we know a lot about the grey market. We are technically part of it, after all. Many electronic component buyers do not understand the different shades of the grey market. It is certainly not black and white.
Many electronic manufacturers put excess and obsolete (E&O) component stock in the ‘too-hard’ basket. These companies are missing out on an extra revenue stream. Plus, failure to act means they are contributing to global electronic waste (e-waste) pollution.
The e-waste produced worldwide each year is worth over $62.5 billion. A tonne of e-waste contains 100 times more gold than a tonne of gold ore. Gold is just one of many precious metals used in microchips.
There is money to be made with excess inventory, so where are companies going wrong?