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Data-Driven Solutions: Relocating Unproductive Inventory

Data-Driven Solutions: Relocating Unproductive Inventory

Strategic use of data has delivered powerful solutions and competitive advantages to for individuals, organizations, and industries for years.

While data can be valuable to a company, many are unclear on the type of data to collect or how it can help them answer questions, make informed decisions, or achieve goals.

Throughout January, tED magazine is sharing the inspiring stories of companies that solved unique problems through the intelligent use of gathering and analyzing data.

 

Company Problem: With an inefficient system of relocating unproductive inventory among branches, the distributor wasn’t fully capitalizing on its investment dollars.

Data-Driven Solution: Development of a comprehensive new model to help efficiently redistribute unproductive inventory to other branches where it will experience greater demand.

Products that sit on a distributor’s shelf for an extended period of time – whether they’re obsolete, represent overflow from a specific project, or are the result of an inaccurate forecast – tie up investment dollars and warehouse space. But thanks to its proactive modeling, one distributor has been able to identify unproductive inventory and relocate it from branches where it’s not selling to others where it is.

Using their detailed new model, which was championed by their head of commercial operations and supported by their operations and procurement teams, “we can determine the best branch(es) to send unproductive inventory to based on each location’s demand for it and their current stock on-hand,” their data specialist said. “We can further cross-check this with logistical data and minimize costs by redistributing to locations based on their ability to enable fewer transfers of multiple products.”

By using the model, “our company has been able to transfer 3-4 times as much unproductive material as we did through our previous process,” the specialist confirmed, “and our branches are happy to offload stuff that they weren’t selling because it frees up money to spend on higher-velocity items.”

You can learn about more Data-Driven Solutions, or NAED member companies can download the full report for free on NAED’s “Making Strides With Data Insights” page here.

 

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