Process: Inventory – Move it to Lose It

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Same goes for old inventory. Move it or lose (value) it! If your company always executes perfectly and engineering changes are approved then implemented AFTER all the old components are used up don’t read any further. For those who don’t live in your nirvana, keep reading. You are pursuing continuous improvement and your engineering team has executed flawlessly and designed the latest version of your product. But, you still have 5,000 units of the old part on the shelf. Hold on, the tradeshow is next month and your CEO wants to roll out the new design at the show. Of course as soon as the market sees it for the first time, orders will start flying in, sales will increase, and profitability will increase. Whoo hoo! Bonuses for all! Except you are the only one who sees the 5,000 parts and wonders what to do with them. Start with the basics. Call the vendor and see if they will buy them back. If that doesn’t work, see if they have another customer who uses the part and you can sell your old ones to them. If you wait the auditors will have you write them off as obsolete so better to take a small loss now than write the whole thing off in 8 months at year end. Save some of them for service parts if appropriate and move the rest of them. Do it NOW. The longer you wait, the less value you have.

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