Is out of date stock hitting your bottom line?

Is out of date stock hitting your bottom line?

During one of our recent meetings with a prospective customer, we got onto to talking about Expiring goods and the problems this can cause within the business. For the Company we were speaking to this was a huge problem, leading to the write-off of more than £1m of stock last year alone, so I thought it a good topic for this month’s blog.

FOUR SUPPLY BENEFITS OF EXPIRY DATE VISIBILITY

Maintaining accurate records of stock expiry dates can often be an insurmountable task, especially whilst ensuring packing, logistics or supply management teams sell, pack and ship stock in accordance with your expiry date stock management plans.

Let’s not beat around the bush, stock nearing the end of its shelf life is money down the drain – and unless you are aware of it in good time, you won’t be able to execute an appropriate usage plan.

Many future-focused supply chains, not only in the food & beverage and pharmaceutical industries but also in Engineering (lubricants), battery manufacturers and a host of other industries, are turning to digitised supply chain management software to save money in the stocking and supply of goods with an expiry date. Such software platforms offer undeniable benefits to supply planning teams, resulting in leaner processes and a healthier bottom line.

Here are just four key benefits to making the switch from spreadsheets to software:

Automatic alerts well in advance

Did you know that class-leading demand planning and supply chain management software will alert you automatically when something requires your attention? Imagine that. Not having to continually, manually monitor your entire stock inventory for looming expiry dates. Instead, you can simply take action when you receive an alert.

Unlike many digitised systems, these alerts are set to prompt action well in advance, giving you time to think and take appropriate action. In other words, it won’t alert you that stock is now out of date, it will alert you in plenty of time that the expiry date is getting closer.

Time to make strategic choices on where to place end-of-life goods

After receiving that alert, you are presented with a sizable window of opportunity to take action; strategic, cost-effective action. You will have time to review which customers accept stock with less shelf-life, or market the end-of-life stock at a discounted price or bulk purchase opportunity, keeping that stock out of the bin and your sales on track.

The ability to order new stock in time to meet demand

With orders pending, discovering that the stock you are holding doesn’t meet the shelf-life requirements of that customer can lead to missed supply opportunities and disappointed customers. With an automated alert in place, you will have time to order new stock with a longer shelf-life in plenty of time to fulfil your orders, retaining customer loyalty and maintaining your reputation.

Support in spotting trends and making future adjustments to purchasing cycles

Digitising your supply and inventory management can assist in spotting key trends which could be costing you money on a regular basis. Perhaps one product category is continually going out of date, indicating that there could be a shift in consumer behaviour, or a supply issue further up the chain.

Identifying these trends – and having the data to support it – will enable you to make adjustments to your purchasing, switch suppliers or open a channel of communication with your customers about their changing requirements.