01 Stay ahead of new surplus stock
Surplus is not a one-time problem. Equipment changes, projects end and demand shifts, so new surplus will continue to appear. Regular controls help identify it before it builds up again.
Catch it early
- Use ageing thresholds to trigger a review
- Flag major operational changes such as equipment replacement, project closures and site consolidations
- Track changes in expected demand and review stock when demand drops significantly
- Track warehouse space used by surplus stock and review it when this starts to increase
Reduce what builds up
- Review purchasing parameters: minimum order quantities, safety stock and reorder points
- Share stock visibility across sites to reduce unnecessary duplication
- Include surplus planning in project planning: decide upfront what happens to unused stock when a project ends or changes
Review regularly, act earlier
Fixed triggers surface surplus stock while it still has value. A small volume each cycle is easier to handle than years of accumulated stock.
02 A four-step review cycle
The first four parts of this series form a practical process for managing surplus stock. Work through the four steps in sequence to identify, assess, decide and sell.
Step 1
Identify your surplus stock
- Review your systems and storage areas
- Identify potential surplus
- Classify stock into the five categories
Step 2
Calculate the cost
- Determine your surplus stock value
- Calculate annual carrying costs
- Measure the warehouse space it occupies
Step 3
Decide what to keep and sell
- Start from the default decision
- Apply the keep or sell criteria
- Get the final decision approved internally
Step 4
Turn surplus stock into value
- Prepare your stock list
- Get a valuation and agree the sale
- Arrange collection and receive payment
Repeat the cycle
Run the process on a fixed timeline and schedule the next review before closing the current cycle.
You are now in control of your surplus stock.
With reviews scheduled and ownership assigned, surplus is caught early instead of accumulating. When the next cycle is due, start again at Part 1: each round is faster, because the definitions, thresholds and ownership are already in place.