February 21, 2018
Spring cleaning comes early in the fulfillment industry so that the new year starts with a clean slate. As 2017 came to a close, Ingram Micro was busy shipping out last minute holiday orders, kitting special projects and making sure our customers were meeting their business objectives. Two months into the new year, companies have recovered from the ecommerce peak season and focus should be on cleaning up inventory in an effort to optimize fulfillment and reduce storage costs.
During the winter holidays, we supported a variety of seasonal sales promotions and kitting activities, incorporating customized holiday packaging and seasonal marketing inserts. These items typically aren’t used after December and add clutter and cost to warehouse storage, so it’s best to move them out, and while you’re at it — check to see if you have any other idle inventory.
Proactively managing inventory in Q1 has a number of positive benefits for your business — reduced storage costs, reduced inventory shrinkage and increased picking accuracy — so don’t put it off!
Here are a few key things to consider with new year inventory management:
Damaged and Obsolete Inventory
Damaged and obsolete inventory sitting in a facility depreciates in value each month, and its presence increases potential picking errors. So, what should you do with this inventory? Consider having damaged product reconfigured at a repair facility for reselling, and if damages are recurring or consistent, work with your manufacturer to improve the design. If your inventory isn’t damaged, but is otherwise obsolete, find a quick avenue of exit so that you’re not losing value or paying for long term storage on products that aren’t helping your margin – a flash sale should do the trick!
Marketing Inserts and Customized Packaging Materials
Marketing inserts and customized packaging materials are generally used for promotional purposes and are only valid for a limited period time. Consider recycling unwanted marketing inserts and custom packaging materials to free up storage. It is typically more cost-effective to recycle versus dispose of these kinds of materials (Mother Earth will thank you, too).
Inventory Count Management
If you haven’t already, consider having a thorough count done on ALL of your existing inventory shortly after peak season. Having accurate numbers will help with sales planning and eliminate potential logistical issues on the ground (which otherwise interrupt order flow).
Our facilities regularly conduct cycle counts in our warehouse management system (WMS), prioritizing high velocity inventory; this is a non-disruptive way to manage inventory accuracy on an ongoing basis. Cycle counting is key to maintaining inventory integrity and minimizing discrepancies, but a comprehensive count may be useful following a peak sales period.
In summary, there are many benefits to cleaning up your inventory post-holidays. Phase out that unwanted inventory and invest in advancing your business. Now is the time to freshen up your stock and prepare your business for future product launches and campaigns!