Your model works great for finished goods geared toward the general consumer. But not so much w/ B2B when you are trying to move board level electronic components such as semi's, I.C.'s an passives. 1 or 2 generation old processors or memory devices and disc drives ( commodities) would fair better in your model.
I like the analogy you used. Yes, it's rotten fish when you have unneeded stocks you can't move in the warehouse but it can become either dried fish (possibly eatable) or gold nuggets (definitely worth a bundle) if the third-party partner (distributor) can move it. Anytime an OEM or supplier has excess inventory it's a problem but for distributors it can be an opportunity, one loaded with dangers too.
What are your thoughts on utilizing an online liquidation auction platform to manage liquidation inventory? It is definitely a very efficient model, and rewards the company with higher recovery rates. We've seen this work for for retailers like Walmart, Macy's, and Sam's Club, who partners with B-Stock Solutions to help build and manage a liquidation auction platform for them (Walmart Liquidations for example). This results in reduced overhead and improved recovery rates. It reduces the need to find the perfect distributor to work with, protects your brand, and makes liquidating to a hundreds of buyers as easy as it is to liquidate to one buyer. They also don't have to worry about building a buyer base, because they can tap into B-Stock's liquidation buyer network.
Here's a quick video on how it works: http://vimeo.com/19337735
To the owner of the excess it is 'fish'......to the buyer of the excess there will invaribly be nuggets of gold and boxes of rocks......one just has to have experience (lots of it) when buying OEM & CM E&O inventory...and lots of courage to fork over the cash....it is not for the faint of heart!..........If you are rigt 51% of the time you will make $$$!
Exactly. Conversely, though, some people have made a killing by selling inventory piled up in some warehouse that suddenly went into tight supply situation. It doesn't happen always but occasionally when it does, somebody smiles, happily.
Thanks for an excellent overview of an important, and often avoided, topic. You bring up a key aspect related to inventory date code - which points out that it is best to address excess inventory issues rapidly and aggressively once they are recognized.
Inventory liquidation if not done in time can turn out to be a monstrous job later. It is the dead skeletons nobody wants to touch. Myself as an IT manager of a manufacturing company have seen how even the top bosses are averse to dealing with this issue. From the EDP department it was our duty to bring out to the notice of the top management and the board of directors the non moving items. Most of the time the operations managment used to somehow circumvent the subject.
For electronics inventory the timely action is all the more important as the value of the stock diminishes by geometric proportion with time ,compared to the mechanical items.
A clear cut company policy on automatic transfer of the excess stock to the dead inventory and a tie up with third party to liquidate the same will definitely help.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.