Ways to Clear your MRO Inventory

MRO products, needs so many spares to be kept at warehouse for reducing the production time. Holding idle and excess MRO spares in your inventory may lead to high storage cost, no space for new spares, delayed production, delayed procurement etc. 

Let discuss here on top 4 ways to clear your industrial spares

• Reaching third party people 
• Maximizing stock order purchases
• Setting up a percentage
• Purchase discounts 

Reaching Third Party People 

Well incase of emergency, also to reduce the effort being spent on such obsolete spares, you can reach out to an eCommerce place for industrial products, where they help in liquidating your idle spares online.

Purchase Discounts

  Always a very unpopular suggestion but one that should make a lot of sense . Purchase Discounts are an automatic injection to the gross profit and net profit of the your Spare Parts department. But, with obsolescence in your inventory, you are merely writing a check for commission and interest on that idle inventory! Take the purchase discounts earned monthly and apply this toward your inventory adjustment account until your idle inventory is reduced to nothing. Once your idle inventory is under control, your purchase discount become a true profit for the department. Purchase discount dollars are the best way to purge yourself of non-returnable inventory that there is.

Setting Up a Percentage of Gross Profit Monthly

Taking a fixed dollar amount or a percentage of the gross profit at month end is another way to “bank” some reserve for purging idle inventory. With the reduction in return allowance and return privileges being offered by most manufacturers today, this becomes almost a necessity in the unpredictable world of reactionary retail sales. Looking at your price break escalation tables and potentially the reduction in discounts to wholesale customers is a great way to work a few dollars back into the gross so as not to drastically reduce gross in the name of idle capital.

 Maximizing Stock Order Purchases

 Too many non-critical parts are purchased through the special order process that earns very little or no return reserve from the manufacturer. Communication with your service department and/or wholesale customers as to time frame can help you maximize putting parts easily accessible from your facing depot on the weekly or daily stock order to earn the maximum return allowance. Watch your return reserves grow if you can master and control this process.