How often do you have a go at the little enviable task of cleaning up the freezer? My wife and myself decided to go for it last week. Why last week? Simply because… we were confronted with a lack of space to store new stuff.
When cleaning up, we came across products we had to throw away because they had expired. For other products, we planned to eat them the same day or the next, because they were about to expire… We also decided for the future to buy only 3 instead of 4 different flavours of ice cream, since the whole family is always opting for those 3 anyway. And next time we will buy boxes of 500ml instead of a litre… it always takes months before those big boxes are empty (our kids don’t get to eat ice cream every day). When we put some order in what was left and stored it nicely, it turned out that a full drawer remained empty. No need to buy a new, extra-large freezer… luckily.
Make a scan of your inventory situation and do some cleaning up
I might have exaggerated in this short household example, but doesn’t this sound familiar? This is what often happens. Not only for your freezer, but for your garage as well, or your office and also for your company’s warehouse. So before you decide that your warehouse has become too small and you need to expand, I would advise you to first make a scan of your inventory situation and do some cleaning up.
What is in your warehouse at the moment and what do you really need? Are there any products that you are no longer able to sell due to the expiration date or because they have been damaged? Then throw them away! You are going to have to do it once anyway and until then, they only take up precious space that you could use for other products.
You may want to organize a promotion or a sale for products that are about to expire or that have gone out of fashion and therefore hardly move. This way you still earn some money on them, you make some extra space available and you avoid having to throw them away in a few months.
Is it only useful to make such an inventory analysis if your warehouse capacity seems to be insufficient?
Certainly not! Even if you have more than enough space, you should make sure that your inventory does not run too high. After all, inventory always costs money. You have to pay rent and electricity for the building where your stock is stored. And even if the warehouse is your own property and the stock can simply be stored outside, you freeze capital by keeping stock, capital that you can’t use for anything else. Besides, the more stock you have, the greater the risk that changes in market demand will make the stock obsolete at some point in time.
If you turn it the other way around, with the space that is freed up by cleaning up old stock, you may be able to launch a new product category that complements your current range. In this way, these stocked items are not only a cost, but also an engine for growing your sales.
In a next article that will be published on LinkedIn in 2 weeks, I will write further on this topic, and discuss more profoundly the inventory that does move, the “ice cream” of your warehouse. You definitely want to keep these items in stock, but you also want to ensure that they do not take up too much space in your warehouse.
Did you like this article? Would you like to discuss whether and how these ideas could apply to your warehouse? Then please contact me at firstname.lastname@example.org and I will be happy to explore this topic further with you.