How to Reduce Negative Effects of Slow-Moving Inventory
The “80-20” rule refers to the 20% of best-selling SKUs that account for 80% of a business’s revenues. While it makes sense to focus on this 20%, your bottom line also depends on efficient and strategic inventory management of your other 80% of products. Especially in small and mid-sized facilities, slow moving inventory can quickly accumulate and take up much-needed inventory positions, extend travel paths, and take up slots that could be used for fast-moving inventory.
Track Your Slow-Moving Inventory
Balancing inventory between having too much and too little is a challenge. One of the best strategies here is to prevent your inventory from getting out of control in the first place. Keep close track of sales and resist the temptation to stock up too much on raw materials and finished goods. Periodically review inventory movement so you can eliminate the weakest performance. Slow moving and obsolete inventory are typically found towards the bottom of the movement and inventory charts. Consider re-marketing, recycling, or removing this obsolete stock. To keep on top of your inventory control, periodically review your slotting strategies, inventory levels, turnover rate, demand forecasting, and consider automated slotting programs or the benefits of automated storage and retrieval system to make your job easier.
Evaluate Your Pallet Storage
With slow moving items under control, consider your pallet storage options to maximize your storage capacity in the least amount of space possible. Bulk storage and static racking systems are available but mobilized pallet racks are also an option if your priorities include throughput, space savings, enhanced storage capacity, centralized storage, and productivity.
Using mobilized pallet racks can free up to 50% of your warehouse space by eliminating fixed access aisles and replacing them with dynamic movable aisles. Though more expensive than static and bulk racking, the mobile pallet racks often pay for themselves with the space savings and increased productivity and accessibility they afford. They can even delay or eliminate the need for new warehouse space investments and costly construction.
Next, you need to determine which storage options work best for which group of SKUs based on the 80-20 rule. Compacting slow moving items will open up areas for increased SKU locations for faster-moving inventory.
Mobilized pallet racks are designed to accommodate existing storage systems for this inventory while compacting your storage footprint so you can recover your warehouse space. For example, fast-moving inventory can be stored in static racks due to how often they are picked, and slow moving stock can be compacted into mobilized pallet racks.
The valuable space savings afforded by the pallet racks could mean additional static racking for your fast-moving inventory or other value-added activities.
Contact Us for More Information
Using valuable space efficiently is important for any business, especially small and mid-sized facilities. Southwest Solutions Group® is here to help. We can help you decide what storage solution would be right for you, and our professional team of experienced installers will implement the system for you through every step of the process. For more information and to receive a free consultation about your storage needs, call us at 1-866-403-3812 or send us a message today.
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