This is the second part of a three part series about identifying and solving common wholesaler inventory problems.
Stock available with zero sales
This is variously referred to as ‘dead stock’, ‘slow moving and obsolete stock’ or SLOB!
Nobody wants valuable cash tied up in inventory that is sitting somewhere gathering dust. Again, the first step is to get visibility of the data. Apply a filter such as, “Show me any article/store combination that has positive inventory, but has not sold a single unit in X weeks.”
However, before you leap to the conclusion that this particular article just doesn’t sell in that location, ask yourself whether the stock may simply not be on show. Is it in top stock, or out of reach of the customer? Maybe it is in the stock room on a pallet, out of sight and definitely out of mind. Or could it be phantom stock altogether that just doesn’t exist in that store?
So, first prioritize the biggest dead stock issues in the retail network, either in terms of unit volume or value. If you have a Field Sales Representative who can go into the store in question, armed with the data, that is ideal. If not, a telephone call to the store can sometimes be enough to raise awareness of a dead stock problem and get it addressed. It is, after all, in the best interest of the store to make sure stock is on show.
If an article is not on show for whatever reason, clearly the sales are going to suffer, which means a compromised rate of sale. Finding that stock and getting it on show will result in a sharp increase in sales, a restoration of the velocity, and therefore a better replenishment profile.
Of course, your issue with slow movers might not be a question of not being on show. The product might just not be a good seller in that location, which requires a different approach and a conversation with your buyer about ranging, and perhaps even a markdown.
Ouch, did we really just say that out loud…?