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Excess and Obsolescence
What is E&O
Excess Stock is a term used in inventory management, and is often called a number of different things; overstock, stock surplus, excessive stock, or excess inventory.
Source - easystock.com
Obsolete inventory is a term that refers to inventory that is at the end of its product life cycle. This inventory has not been sold or used for a long period of time and is not expected to be sold in the future. This type of inventory has to be written down and can cause large losses for a company.
Source - investopedia.com
Customer
- Cornelius Global
- 50+ locations (factory + DCs)
- 350m GBP turnover
- 60m GBP inventory
Situation
- End of year E&O stock at 9m GBP
- New product introduction process contributing to E&O
- Planning process contributing to E&O
Task
- Understand the global E&O drivers
- Implement a robust process to reduce the current year E&O provision
- Reduce the following year E&O by 50%
Actions
- Setup & Led a task force to sell E&O inventory globally
- Introduced Sales & Operation Planning to prevent future E&O
- Updated the New Product Introductory process to accommodate the support the product life cycle (phasing in of new products and the phasing out of old products)
Results
- 2.6m GBP generated in cash
- 1.2m GBP profit released back to the business
- Subsequent E&O reduced by 50%
Awards & Memberships
