Forced Stock

[joe r]

Chuck is always referring to forced stock.
I use a method of eliminating most of this.
Any item that is returned by a customer, ordered wrong or removed from the special order bins after four weeks is placed in our "return bin". If the cost is over $100.00 it is returned on the 30 day return. All others are the first items to be put on the monthly cycle return.
After all the parts in the return bin are put on the monthly return the balance of the return allowance is used for aged parts.
After one year only parts that phased out are left as aged parts. Our NS percentage has consistently been below 5%.
At first it took longer to get the older parts out of the inventory but now it is no concern at all. The only drawback is occasionally I have to re-order parts for service customers.
Any feedback on this process would be appreciated.

Joe R

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[Chuck Hartle]

Hi Joe,

That is awesome. That is exactly how you should be doing it. I have only one small suggestion for you. Don't be so quick to return 'all' your parts under $100 on your next return. I would suggest that you might keep some of the parts with a model high year of 1999 and greater for 60 to 90 days that look like they might sell. Things such as gaskets, seals, bearings, and such.

It is a great luxury if you can continue to return your forced stock and keep your inventory obsolescence under 12 MNS in the process. I am sure that this leaves you very little obsolescence to deal with because the forced stock is usually what leads to obsolescence 12 months from now anyway. Great idea and great process!

Chuck Hartle'