How do you avoid holding obsolete or expired products?

1 Know your products

The first step to avoid holding obsolete or expired products is to know your products well. You should be familiar with their life cycles, demand patterns, shelf lives, and quality standards. This will help you plan your purchasing, stocking, and selling strategies accordingly. For example, you can use the ABC analysis to classify your products based on their value and turnover rate, and allocate more resources to the high-value and high-demand items.

3 Forecast your demand

The third step to avoid holding obsolete or expired products is to forecast your demand as accurately as possible. You should use historical data, market research, and customer feedback to estimate your future sales and demand fluctuations. This will help you adjust your inventory planning and ordering accordingly. You can also use demand forecasting tools and techniques to improve your accuracy and reduce errors. For example, you can use the moving average method to smooth out seasonal or random variations in your demand.

4 Manage your suppliers

The fourth step to avoid holding obsolete or expired products is to manage your suppliers effectively. You should establish and maintain good relationships with your suppliers, and communicate your expectations and requirements clearly. This will help you ensure the quality, quantity, and timeliness of your deliveries. You can also negotiate better terms and conditions with your suppliers, such as discounts, returns, or consignment agreements. For example, you can use the vendor managed inventory (VMI) model to let your suppliers monitor and replenish your inventory based on your demand.

5 Implement inventory control

The fifth step to avoid holding obsolete or expired products is to implement inventory control measures and policies. You should set and enforce optimal inventory levels, reorder points, and safety stocks for your products, and avoid overstocking or understocking. You should also conduct regular inventory audits and counts to verify and correct your inventory records. You can also use inventory control methods and tools to optimize your inventory management. For example, you can use the first in first out (FIFO) method to ensure that you sell the oldest products first.

6 Dispose of obsolete or expired products

The sixth step to avoid holding obsolete or expired products is to dispose of them properly and promptly. You should identify and separate the products that are obsolete or expired, and mark them as such. You should also follow the legal and ethical guidelines for disposing of them, such as recycling, donating, or destroying them. You can also use disposal strategies and techniques to minimize your losses and maximize your benefits. For example, you can use the markdown pricing strategy to sell your obsolete or expired products at a lower price.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?