Did you know that electronic manufacturing companies have at least 1% of turnover / revenue tied up in excess or obsolete stock? When we first highlight this to a company director, they typically don’t believe it. Initially it seems like a crazy figure, how could a well-managed company possibly have that much excess or obsolete stock? Usually it takes only one or two phone calls from the director to confirm that we are underestimating the value of this stock. Many companies have as much as 5% of revenue tied up in useless stock! Think what that equates to in terms of profit if you could turn it back into cash?
We have been managing excess and obsolete stock for some of the largest manufacturing companies in the world for over 15 years now. In this time we have learned some invaluable lessons on supply chain management. We have numerous examples in the “case studies” section below that highlight some of the common occurrences we see when visiting and working with our clients. The key here is to accept that this is a truth that needs action. You are certainly not alone.
Excess and obsolete is part and parcel of manufacturing. None of us operate in a perfect world. Forecasts are really best guesses and however scientific your system or process there are always unforeseen circumstances that can catch you out.
We have designed a solution to better manage this inevitable cost to your business.