Supply chain bottlenecks create significant delays and cost your business money, so it is important to learn how to navigate them
How to Deal with Excess Component Stock
There are a number of reasons why OEMs may accumulate excess stock – it could be a simple case of over-ordering or sales of a product not reaching the expected levels. The electronics industry is one of rapid development and innovation, however, and components quickly become obsolete.
Because of the current rate of technological advancement, OEMs can often find themselves in a situation where they have excess stock they can no longer use that is taking up space and incurring storage costs.
With that in mind, we’ve put together a few suggestions on how to deal with excess component stock so you can free up some of your capital.
Use in new products
One way to deal with excess stock is to see if you can use it in new products. If a product has become obsolete, it doesn’t necessarily mean that all the components have as well. The components may be able to be substituted in some of your other designs to use your excess stock instead and possibly free up a more valuable component or one that has limited availability. If you can find a new application for excess components, you may be able to save some money on future orders, at least temporarily.
Trade with others in the industry
Another way to use your excess stock is to try and trade it with others in the industry for components or parts that you do need. Whilst you may not have a use for the components in such volume, OEMs who are creating different products may have use for them and may be able to offer you components in return that you do have more need for. You may even be able to strike an ongoing agreement with trusted companies for similar situations in the future.
If it is possible, the simplest way to deal with excess stock is to simply return it to the supplier and try and get a refund. This will not always be an available option, especially if the component is no longer in widespread use. Even the component has not become obsolete, due to the rate of technological development, it could very quickly become so. Because of this, even if the reason for your excess stock is over-ordering or intentional stockpiling, it may be worth considering returning whatever you don’t need while you know you can.
Excess stock management with Rebound Electronics
The above suggestions are all good ways of dealing with excess stock, but as they are dependent on other factors or parties, they may not always be viable options. One simple solution that is always available to you is to work with us at Rebound Electronics to sell your excess stock.
This way you can free up some capital and increase your cash flow, an ever-important aspect of supply chain management that has become even more significant since the onset of the coronavirus pandemic.
Dealing with excess component stock is a problem that many OEMs currently face, ironically alongside a shortage of the components that are in the highest demand. Being proactive and finding creative solutions for these issues is the best approach because the longer you keep excess stock, the more likely it is to become obsolete and lose its value.