4 Tips for Handling Excess Inventory
Nothing can tie up your warehouse more than excess inventory.
Excess inventory occurs when the number of products sold does not match the expected demand. There are several potential causes, including:
- Product mismanagement
- Disorganized warehouse
- Imprecise order projections
- Canceled orders
- Changing economic conditions
This frustrating problem can easily put a strain on your staff, your storage systems and potentially even rent or insurance costs. Having too much inventory also affects cash flow, as it means more potential profit and less money in the bank.
When it comes to dealing with excess inventory, here’s what we suggest:
Assess Your Current Process
An excess of inventory can be difficult to see coming if your warehouse doesn’t have the right tracking capabilities or storage systems.
Tracking your process from beginning to end can help you identify where products start piling up. For example, are your storage systems labeled and organized correctly? Without proper organization, it’s easy to think you need more products than you realize you have.
Or, you might find a discrepancy in the number of canceled orders you receive when compared to your monthly projections. Are your projections effective? What data is available to you to help you determine more accurate projections?
As you assess this process, you can begin to rectify any large inventory errors that happen throughout the process, including any inaccurate counting, tracking or re-stocking.
Many of these issues come through human error, which can be addressed by ensuring all employees, especially new ones, are fully trained. This should include the ins and outs of the tracking, picking and packing process. A lack of training can lead to longer picking times, packaging errors and goods being damaged.
During your review, if you notice the obstacles you’re encountering are beyond human error, it’s time to try new organizational methods.
After analyzing your process and potential roadblocks, you can determine the best way to get past them. For many warehouses, this involves prioritizing organization.
Organizational methods aren’t one-size-fits-all. In order for a method to be helpful, it should enhance the productivity and efficiency of your warehouse, along with making the jobs of your floor team easier.
It’s a good idea to sit down with your employees to discuss what possible organizational improvements they would like to see, as they’ll likely have ideas.
Although you’ll have to pick the methods that work best for your space, popular organizational tactics include:
- Transitioning to a lean inventory management methodology, which means eliminating any activity or procedure that uses resources but does not add value in return.
- Adjusting your current workflows to ensure every department has the right amount of workspace.
- Re-evaluating your picking process, including transitioning to a new one that fits your current needs.
- Investing in tracking systems such as blockchain technology or warehouse management systems.
- Assessing your storage, including asking if you have adequate space and storage equipment (racks, shelves or pallets) to keep your products visible and accessible.
Getting organized means using the space that you have effectively. Even if it feels overwhelming, rehauling the way your warehouse is organized could make your daily operations run smoother and help avoid future issues, including an excess of inventory.
Invest In Technology
Outside of organizational methods, there are also technological systems that can also help your inventory stay accounted for and your employees track your products.
- Mobile Technology: Warehouses can provide mobile technology to allow employees to quickly and efficiently scan shipping labels, manage inventory and update picklists from anywhere.
- Voice Technology: Voice technology can greatly improve communication among team members and warehouse managers. It allows team members on the floor to quickly get in touch with managers by using tools like microphones, headsets and wireless computers.
- Warehouse Management Systems: With the ever-increasing influx of packages, it can be more difficult to manage inventory and ensure on-time shipments. Warehouse management systems can provide easier access to warehouse information, can point out areas of inefficiency and streamline operations.
- Industrial Manipulators: Industrial manipulators are machines with a rigid steel manipulator arm that can be used in several different instances, including when a product is too heavy or inaccessible for employees.
These technological additions to your warehouse can make all the difference, especially with industrial manipulators. For example, Dalmec creates both standard and customized machines to help every warehouse improve their productivity and safety.
Industrial manipulators can help your employees move products easily, allow for quicker packaging and restocking times. They’ll also be able to reach higher, which helps take advantage of more space in your warehouse for storage and organization.
Unload Excess Inventory
If your excess inventory can’t be managed, it’s time to strategize ways to clear it out.
There are a few methods to help you sell the inventory that’s clogging up your warehouse, including:
- Revamping your company’s marketing strategy to target the right audience.
- Discounting items that have been difficult to sell.
- Offering persuasive incentives, such as free shipping.
- Bundling items, allowing more products to leave the warehouse per order.
- Calling resellers in your area to see if they’re interested in your overflow.
When in serious trouble with excess inventory, you could turn to inventory liquidators to help unload excess products and get the profits back in your bank account. However, it’s important to research these options thoroughly before proceeding. Start by discussing with other warehouses or retailers in your area to see who they trust.
Addressing Your Inventory Issue
While excess inventory may feel like an impossible obstacle right now, this issue can be resolved with effective action in the moment and planning for the future.
If you feel your inventory issue could use the help of an industrial manipulator, contact Dalmec today. We’d be happy to discuss your warehouse’s issues and how an industrial manipulator could be right for your business.