How to Manage and Minimize E&O Inventory for Your Company’s Financial Health
If you have recently toured your manufacturing and warehousing facilities, you may have seen excess and obsolete (E&O) inventory without realizing it. Many companies only see E&O when it creates an alarmingly large lump at the end of a financial reporting period. The discovery is often accompanied by some level of negative emotion from the C-suite, as generally accepted accounting principles (GAAP) require that inventory be written off when deemed obsolete.
Physically, E&O makes your operation less efficient as it gets in the way of day-to-day activities. Over time it can become damaged, and it ties up working capital while increasing operational expenses.
Managing and reducing excess and obsolete inventory can be daunting, but it is essential to any company’s financial health. By taking proactive steps, companies can minimize their E&O inventory and avoid significant financial losses.
Download this white paper to learn more about:
- E&O inventory management
- Containment
- Disposition
- Strategies for minimizing E&O inventory