Minimizing Slow Moving Inventory (SLOB) Abstract:
Slow moving and obsolete inventory (SLOB) is a result of inefficiency in the forecasted demand, where supply (materials or product in inventory) exceeds demand over a period of time. Amounting to an average of 3%-5% of revenue, SLOB is a small line item in the budget that offers the opportunity to recoup big dollars, if manufacturers can manage it more effectively. To do so requires the right strategy, the right data, and solid alignment between sales, operations, and finance but if it’s done well it can represent “hidden treasure” that can be turned into working capital, warehouse space, or profit on the books.
This white paper provides an overview of SLOB management – what it is, why it matters, and how it can benefit the enterprise – as well as recommended strategies for optimizing this critical business practice.