Managing surplus stock

One characteristic of a good inventory management program is an on-going dead stock and excess inventory control program. Short-term surplus inventory is inevitable. The key is

to monitor it constantly, make adjustments, and transfer products to other locations as needed. Excess or long-term surplus inventory is usually considered to be any quantity of a product greater than a 6- to 12-month supply. There are numerous tools in the system that can be used to manage short-term and long-term surplus.

Use these methods to review your surplus stock.

  1. As part of your daily review of the Purchase Entry Recommended Replenishment Action Report, check for any surplus in other warehouses using theWhse Surplus option. You can print a product’s surplus in all warehouses, in warehouses within a zone, or from warehouses in other companies. The surplus amount is displayed in the Whse column.

    Using surplus in related warehouses rather than buying from a vendor helps keep your costs down. You can reposition stock items to create better turnover.

    You should consider the effect a surplus transfer has on your target buy. If the surplus transfer disrupts your ability to meet the vendor’s total order discount on the remaining items, you must weigh the benefit of accepting the surplus against the whole order discount. You may be able to justify adding other items to the purchase order and accepting the surplus. Surplus that is printed on the Purchase Entry Recommended Replenishment Action Report includes associated costs.

  2. To view surplus stock in other warehouses, access the Product Availability Inquiry - Warehouse Availability view.
  3. To view all Order-as-needed and Do Not Reorder stock items, and clear ordering controls that might exist for these items, run the Product Needs Analysis Report.
  4. To print a report of short-term and long-term surplus stock, run the Product Surplus Stock Report. Select the options to create a CSV-formatted output file that can be sent to vendors or other warehouses. When vendors and other warehouses approve the returns or transfers, the CSV file can be imported in Purchase Order Entry or Transfer Entry to create PO RM or WTs.