Enhance Your ERP Inventory Software With Thermostock®
Thermostock prevents up to 90% of wholesale distributors' dead stock, most often caused by low-selling SKUs.
Automatically Reduce Your Dead Stock With Thermostock
Tens of Thousands of SKUs Are Unmanaged
High-volume SKUs represent the majority of revenue for your business, and your ERP system probably does a pretty good job at forecasting these SKUs.
But it’s the low-volume SKUs that make up the vast majority of dead stock for wholesale distributors. From our dead stock analysis of more than 100 wholesale distributors across North America, we’ve found that more than 85% of stocked SKUs sell 10 times or less per year.
How Thermostock Helps
Since a vast majority of SKUs only sell 2-3 times per year, it makes it impossible for ERP and third-party supply chain planning systems to accurately forecast them. ERP and third-party supply chain planning software are forecast-based, and the math used within these systems assumes that each SKU sells at least 20 times per year, which isn’t the case.
With a direct integration to all ERP systems, Thermostock automatically identifies and optimizes low-volume SKUs, allowing buyers to focus on the forecastable A and B items.
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Automate SKU rationalization
Thermostock analyzes recent sales of all your stocked SKUs. It marks those not sold in the last 12 months as nonstock or special orders, ensuring that your non-selling SKUs are not purchased to prevent dead stock.
Configure best-practice inventory policies
Define policies around the specific goals you want to achieve.
Automate Min/Max
Thermostock analyzes the latest sales characteristics for each SKU to calculate the optimal Min/Max, sending recommendations back into your ERP system.
Rebalance
Thermostock recommends a monthly rebalance of overstocked low-volume items to other locations that are still selling those items. This feature prevents unnecessary new inventory purchases, lowering the Cost of Goods Sold (COGS).
Data-driven optimization
Leveraging machine learning and AI, Thermostock continuously learns and improves to provide ongoing optimal inventory recommendations even as sales fluctuate.
North America’s Largest Wholesalers Partner With Us to Optimize Dead Stock
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Your Questions, In Focus
What is dead stock?
Dead stock refers to inventory that a wholesale business has on hand but is no longer able to sell – or has a very low likelihood of selling in the future. Most wholesalers consider inventory over 12 months of supply to be dead stock. Dead stock ties up financial resources and storage space, making it an area that wholesalers prioritize optimizing to increase important inventory KPIs like inventory turns.
What causes wholesaler dead stock?
Wholesaler dead stock can be caused by several factors including:
- Changes in consumer preferences: If consumer preferences shift suddenly, wholesalers may be left with inventory that is no longer in demand.
- Overestimating demand: Wholesalers may order excessive quantities of a product, anticipating higher demand than what actually materializes.
- Inaccurate forecasting: Poor forecasting of market trends and customer demand can lead to ordering the wrong quantities of products.
- Seasonal fluctuations: Seasonal items may become dead stock if they are not sold within their season.
- Product obsolescence: Advances in technology or changes in industry standards can render certain products obsolete, leading to dead stock.
- Large vendor minimums: Sometimes quantities are purchased that are in excess of a year's demand.
How can I reduce my dead stock?
A dead stock analysis of your inventory can help provide the insights you need to prevent up to 90% of your dead stock. This analysis can lead to significant optimizations to reduce your dead stock. It will:
- Identify and monitor SKUs that are not selling or slowing down in volume. Wholesalers stock tens of thousands of SKUs that have not sold in the last 12 months or sold less than 10 times in the last year. These slow or non-moving SKUs only contribute to an average of 20% of your revenue, so buyers simply do not have the time to review their settings in your ERP purchasing module.
- Implement inventory policies that automatically turn non-selling SKUs to non-stock status in your ERP purchasing system.
- Implement inventory policies that automatically calculate optimal Min quantities for SKUs that have sold fewer than 10 times in the last 12 months. These SKUs typically have poor forecasts in a purchasing system.
- Rebalancing inventory to transfer non-selling items with dead stock to other locations where they are still selling.