While safety stock can mitigate lead time variability and demand uncertainty, it is important to fully understand what degree of protection excess electronic inventory provides and what to do with it when it is no longer needed.
With recent fluctuations in the supply chain, purchasing strategies have changed to incorporate more cautious approaches, such as the procurement of safety stock. This has created larger problems, with some businesses staring down excess electronic inventory they are finding difficult to move. Indeed, when supply chains normalize and inventory becomes readily accessible, bloated safety stocks can become difficult to offload, and quickly turn from assets into liabilities. So, how should you be thinking about your excess inventory now?
First, Consider Alternative Parts
Avoid panicked safety stock purchases by planning as early as possible for key components. During the initial stages of product design, consider availability and lead time risk for these components.
Delay locking in component choices until later in the process. For example, create two PCB layouts in early product planning, and evaluate which is best in terms of availability and price later.
A distribution partner can help identify components that may present lead-time hurdles, giving you an opportunity to find alternatives that are more accessible. With a broader base of suppliers and access to equivalent parts, you can avoid buying excess stock you may never need.
Expand Your Network
Global supply chains provide opportunities for sourcing and selling. Working with a global distributor that has the connections to move your excess electronic inventory means that you are reaching the broadest network of buyers.
The broader the distribution network, the more likely your materials are to find a buyer. A distributor can run the data on your excess parts and create global matches quickly and efficiently. This can give you real-time market visibility, helping you access up-to-date assessments and analytics to locate RFQ commonalities across vertical markets.
Take Stock of Your Inventory
You can take control by proactively planning for your excess stock post-shortage. Carefully watching your inventory to see when your excess security stock is no longer needed can help you identify the right time to start working with a supply chain partner.
You can also identify your storage demands upfront and prepare to deal with your excess safety stock accordingly. If you are facing storage constraints, consider consignment options that will allow you to store your materials offsite with a distributor while you look for a buyer.
Stay Tuned into the Market
Watching the market to ensure you enter at the optimal moment takes time. A supply chain partner can help take the burden off by helping you analyze market trends to find the right time to sell excess safety stock. You acquired this stock strategically, so there’s every reason to take a strategic approach to move it. Ensuring that your excess hits the market at the right time could make a significant difference in your return.
Holding onto excess electronic inventory can create a number of issues, including cash flow shortages, warehouse space constraints, and rising operational costs. All of these can add up quickly if your excess safety stock lingers beyond its useful lifespan for your supply chain needs.
The last few years have been a period of unprecedented market instability. Now that the dust has begun to settle, it is time to make your surplus inventory work for you.
Read more:
- Is now the right time to buy electronic components? The case for long-term planning and forecasting
- Putting the impacts of inflation on the global electronics supply chain into perspective
- World events continue to impact electronic components supply chains