Slow Moving and Obsolete, Bad For Your Inventory, Worse For The Lakers

Your slow moving inventory will not retire itself.

Supply Chain Slow
Slow Moving Supply Chain. Getty Images

As a supply chain manager, you have to set emotions aside when managing inventory. For example, let’s say you’re the supply chain lead for a telecommunications company. And you’ve got a modem that used to be your company’s best seller.

That modem – back in 2001 – was cutting edge technology. Every doctor’s office, small business, and dorm room needed one of these modems. 

The halcyon days of modems sales appeared destined to be infinite.

The more you made, the more you sold. You ordered more and more components and you sent job orders to the production floor for larger and larger production runs. You built more and more inventory and you sold it all. 

But that was then and this is now.

And in the now, the bottom falls out. Your modem is still the same great modem. But the world changed on you and your modem. Your 56k modem with its fancy 8000 baud suddenly became the fastest prop airplane in a supersonic jet landscape. 

Now all those modems sit on your warehouse shelf. They haven’t moved in what feels like years. And you’ve invested more money than you want to think about to put them there. 

Slow moving and obsolete inventory costs you real money. You paid for it. You’re paying to insure it and house it now.  And if you’ve got too much of it, it may just keep you from succeeding.

Think of your slow moving and obsolete inventory like the Kobe Bryant of your warehouse.

A once proud and highly successful product that now spends much more of its time sitting than it is moving.

Like the Lakers perennial all pro shooting guard, your own slow moving and obsolete inventory reminds you of the money you invested in it – and doesn't show any economic return on that investment these days.

So what can you do? 

Well, first, is there any chance your slow moving inventory will publish a poem on the web and then take itself off your books? That would be the honorable thing for your slow moving inventory to do. 

But unlike the Black Mamba (Google "Black Mamba" and "Kobe" if you don't get the reference), your slow moving inventory will just continue to sit there. Year after year. Eventually, Kobe would listen to his body - the torn body parts, the broken knees, the shredded shoulders - they finally wore him down.  And even though it may have been a year or two (or four) longer than some would have liked (I'm looking at your Lakers' Salary Cap) - he finally wrote his poem and scheduled his farewell tour.

Your own slow moving inventory won't do that. So you're going to have to take care of your slow moving inventory yourself. How do you do that?

The first thing you need to do is to identify it. Do you know what your inventory position is? Do you know your inventory turns? Do you have a cycle count program that can help you figure all of this out?

Once you identify your slow moving inventory, get it moving. Tell your sales force to sell it. Get your marketing department to spin it.

Let your finance folks write it off. 

And then use demand planning, lead time management, and cycle counting to prevent slow moving inventory from showing back up again. But if it does, there's a good chance the Lakers will sign it.