One of the biggest challenges for any business is the overstock of certain SKUs remaining in the warehouse. Excess inventory is not only a problem that affects the profit of a company but it has an immense negative impact on other aspects of a business. The company needs to spend funds on the maintenance of this overstock while the company is also mindful of launching new stock due to the unsold old stock.
Every aspect of the business has been digitized in the current scenario. The use of internet technology has aided businesses to run smoothly and remotely. The Digital approach has solved many issues in business operations and the use of digital platforms and technology can also help businesses in solving the problem of overstocking. A business needs to adopt and adapt. There are certain strategies that a business can use in order to reap benefits from the excess inventory.
The first strategy that a business follows while dealing with overstock is running discounts. While it may help a business in selling off the excess inventory lying in the warehouse, it can be a loss-making strategy in the long run. While one can run discounts simultaneously on some products, it is crucial to focus on more technical issues and find out practical solutions for the same. There are certain digital approaches that can be implemented while dealing with the overstock to solve the problem from its foundation.
Digital Optimization :
Digital platforms offer a plethora of options to organise and manage your inventory virtually. Using such digital platforms, make a real-time list of the products you have in your warehouse. This way, you can track the excess inventory and the old inventory that needs to be sold off immediately. These digital inventory management platforms will help your business in demarcating between the new collections and the products that need to be targeted as excess inventory or overstock.
Digitizing the supply chain :
In the contemporary business scenario, business owners need to digitize every crucial operation of the business cycle. Supply chain management is an important part of the movement of the stock from the warehouse to the customers. This process should be digitized to provide real-time solutions for the movement of the overstock. The digitized supply chain with modern software like blockchain and machine learning can help a business in making the products available at the right time. This step will help in selling off the products at a competitive price without incurring a loss on the excess inventory.
One of the best ways to solve a problem is by getting rid of the root cause of that problem. Businesses fail to forecast demand effectively and thus they have to face the problem of overstocking. To avoid this, businesses can use demand forecasting tools and software and eliminate the chances of ending up with an overstock of products or excess inventory.
Excess inventory is a serious problem for many businesses and thus a business needs to adopt pragmatic strategies to solve this issue. The Digital approach is the best answer to solve this problem efficiently.