As fall draws nearer, manufacturers are busy creating programs and promotional literature to launch a full scale assault on your purchasing folks. Because manufacturer’s reps will be touting the latest in shiny new items, Jason Bader of The Distribution Team says that you should have a plan in place to eliminate hasty decisions, resulting in additional dead inventory.
Don’t forget that only a few short months ago, during the annual physical inventory, your warehouse was filled with the unsold carcasses of last season’s sales darlings. Dead inventory kills your profitability in two ways. Not only does it tie up capital; but it actually costs you money in handling. Since we know that new items can cause dead stock, you should use caution and scrutiny when adding new items to your inventory.
In his timely article, Three Heads Are Better Than One, Bader explains how you must make it difficult to bring new items into the company. Instead of letting just one person make the buying decision, consider forming a committee of three - the Sales Manager, the Purchasing Manager and the Controller.
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The Distribution Team was founded by retired industry consultants Gordon Graham and Scott Stratman, and is the the only Gordon Graham™ approved consulting firm. Their mission is to continue to present and enhance the inventory management strategies and philosophies of Gordon Graham upon his retirement at the end of 1996.