What should be done to clear ageing stocks from the warehouse?

'Stocks go to aging' also means to stocks nearing to 'Expiry' or Near Expiry' due to many reasons (Knowing the cause is equally important as getting an effect on it's problem or taking measures to liquidate or sell it profitably). Some of the causes for aging could be:-

• Stocks ordered without any planning for  'Forecast sales'
• Dead stocks (Slow movers or Non-mover's)
• Damaged stocks
• Non-efficient planning of warehousing, storing (FIFO)

Thus, for stocks related to warehousing should be planned with FIFO (First In First Out) . The issue should be high lighted with Logistics on it's importance & the affect on profitability.

If the cause of aging is due to Non-Implementation or Unplanned ordering: Then, the company should develop an 'Forecast-ed Module'. This is significant as this has direct affect on 'Portfolio optimization' as well as Profitability.

For Forecast Module, sales (in Units/cartons/tonne's) should be ascertained for at least2-3 years (To know it's momentum). Sales in Value, Lead time (Duration of lead time --Ordered to actual delivery), Forecast Target MoM (Based on growth expected & moment), Ordering cycle etc

Dead stocks: After using different strategies if the concerned SKU if not been able to crack significant sales than there is no point selling & running the risk of incurring loss. Thus, such SKU's should be ideally discontinued thus maintaining focus on performing range.

Slow Mover's: These are those categories or SKU's which are either new in PLC or have not given significant importance for development. Thus, different strategies could be developed such as Cross-promotions (Promotions planned along with fasted mover's or cash cows), Investments on secondary display, sampling, Ensuring availability in its 'Target Market' Retail stores, Advertising, ATL & BTL activities  etc thus to increase momentum

Damaged Stocks: As this cannot be legitimately sold as regular stocks in open market. As this also implies cost on the company could either be sold in Wholesale or heavy discount sales. (Care should be taken & clear communication regarding the damage should be effective for both retailer & end consumer. As this is the 'Brand communication' & failure to disclose it may significantly affect 'Brand trust' on the range & may loose confidence by the consumers

First In, First Out Policy should be done to avoid ageing stocks from a warehouse.