Why obsolete inventory is doing your business no good
Like it or not, things happen that result in your warehouse(s) being filled with more and more inventory that is excess or surplus to your operation. Rack after rack, shelf after shelf being occupied with material that does nothing but add to your cost and impact your profitability.
By keeping outdated parts in your warehouse you are accepting that your business is living in the past, instead of planning for the future. While perhaps your finance department views this obsolete inventory as an asset on the books (albeit a depreciating one) you are avoiding the opportunity to be forward-thinking and advance the health and viability of the enterprise.
Reasons for getting rid of surplus inventory
The aviation industry is notorious for last minute ordering of parts to get an aircraft back in the air. AOG’s, minimum quantity buys, troubleshooting, minimum order value, parts ordered incorrectly, etc. all lead to that stuff you walk by every day in your warehouse that is costing you money! This inventory adds no value to your fleet nor does it satisfy any of your maintenance requirements either now or in the future.
Regardless of how well your business works on calculating its inventory needs, things occur that are just out of your control. Perhaps you retire an aircraft type sooner than planned or you reduce the number of a particular aircraft type or many other valid reasons all result in surplus inventory that just takes up space in the warehouse and costs the company money.
Surplus material affects the bottom-line because of the many costs associated with its procurement, storage and inventory (both actual and physical). This material takes away from your profits because you are paying for something that can no longer give you a return on your investment. One estimate puts a price of excess/surplus inventory sitting on operators shelves at well into the billions of dollars. This low hanging fruit can feed your bottom line and positively impact your profitability.
What to do with excess inventory to impact your bottom line today
Most operators carry more excess inventory than they care to admit and for some, it is one of the largest costs to their business. It is right up there with wages and fuel. So what is the solution? Depending on your situation, you basically have two viable options; 1) outright sale or 2) consignment. Both have their advantages and can be tailored to maximize your objectives. Mitchell Aircraft can demonstrate how we have helped multiple operators, both large and small, turn stale assets into cash.
With over 30 years of global sales history and a customer base that encompasses every major operator and cargo company in the world, gives Mitchell the market knowledge, experience and expertise that other companies can’t match.
Because of our global outreach, we can respond quickly to resolve any shortages, which results in a less downtime and minimize any disruption to the network.
Turn your unused inventory into cash
Surplus/excess inventory is just part of being in the aviation industry. No matter how sophisticated your procurement and maintenance departments are, inevitably you end up with racks and racks of unwanted, unneeded material that continues to negatively impact your bottom line.
Let Mitchell Aircraft sell your outdated and excess inventory. We can turn those old assets into cash while freeing up your warehouse for the more current and desirable material.
Stop living in the past and start preparing for the future by contacting Mitchell Aircraft today!
