Is Dead Inventory an Epidemic?…What We Found Part 2

This blog series shares findings which my colleague and I discovered while attending Connect, the Epicor P21 World Wide User Group Conference, in New Orleans, LA. (Part 1 can be found here) The majority of P21 users “needed” the ability to identify trends and patterns to stock the right items at the right time.

While this is useful information, it begs the question, “How do they know this is what they need?” What kind of challenges, or “pains” are P21 users facing that they know they need more visibility into their inventory? In this second part of this blog series, illustrating what Cutwater discovered through its’ survey, I want to highlight the major pain points participants expressed in regards to their inventory.

As a quick footnote, all respondents were asked to check all answers that correlated to their business. The resulting percentages will add up to over 100%. This is due to some individuals having more than one pain point or more than one need.pain points chart

Out of the 90 individuals who filled out a survey either prior to or at the conference 73% of them said their biggest pain was that they have “Dead Inventory.” What this shows is that wholesalers are lacking visibility into their inventory. If they were able to see how much inventory they had and able to see all the trends and patterns, they would be able to avoid much of their dead inventory. Wholesalers wouldn’t have to continue to buy products that haven’t moved in 3, 6, even 12 months. They would be able to understand their excess inventory and come up with ways to reduce it. Clearly, having dead inventory is an epidemic in wholesale distribution. Tools like Cutwater and many others are the appropriate remedy. Having the ability to see and analyze inventory is the goal, and inventory optimization is the result of such tools.

Another interesting finding was that while over half of the respondents have both too much and too little on various items, only 27% of the survey participants expressed a pain point solely on having too little inventory. This shows me most wholesale distributors are avoiding stock-outs and making sure they never run out by simply having too much inventory. This is not the most efficient method in regards to inventory. The trick is to right-size your inventory and find that “perfect balance” so you are not losing money or have excess or even dead items sitting on your shelf. There are many tools that can be used to help resolve this issue, you just have to find the right one for your company.

That is just one man’s opinion. I would enjoy hearing your thoughts on the survey results and what you think they show us. Please, leave your comments and ideas below.

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