Excess inventory ties up working capital, increases storage costs, and risks product obsolescence. For Jay Hoehl Inc., mastering excess inventory management is critical to profitability and streamlined operations. Without the right strategy, stagnant inventory can become a major financial liability (source).
- Understand the Cost of Excess Inventory
- Monitor Days Inventory Outstanding (DIO) to determine how long inventory sits before selling (source).
- Use ABC analysis to prioritize top-performing inventory and isolate underperformers.
- Identify the Root Causes
Excess inventory often results from:
- Poor demand forecasting
- Long or unpredictable supplier lead times
- Over-ordering due to fear of stockouts
- Sudden drops in customer demand
Addressing these issues starts with better communication between sales, purchasing, and supply chain departments.
- Reduce Inventory Through Strategic Actions
- Run clearance events with steep discounts to free up space.
- Bundle slow-movers with best-sellers to improve product turnover.
- Liquidate or donate unsellable items to wholesalers or nonprofits. Donations may provide tax advantages (source).
- Use Inventory Management Software
Implementing cloud-based inventory software helps automate:
- Stock level monitoring
- Auto-replenishment
- Real-time forecasting
Using tools like NetSuite, Katana, or Odoo can help Jay Hoehl Inc. gain better visibility and control.
- Track Key Inventory Metrics
Measure the following to optimize performance over time:
- Inventory Turnover Ratio
- Gross Margin Return on Investment (GMROI)
- Fill Rate
- Sell-through Rate
By reviewing these KPIs regularly, your team can prevent overstock scenarios before they happen.
Jay Hoehl Inc. can reclaim capital, reduce storage costs, and improve customer satisfaction by focusing on excess inventory management. With the right strategies and systems in place, inventory becomes a strategic asset—not a burden.
