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
Do You Realize that Tens of Thousands of Your SKU's 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.
Multi-Echelon Network Optimization
Thermostock takes into full account your distribution network and procurement paths. Hubs are connected to their various branches and consider all demand, onhands, inbound inventory and transfer lead times at the branches when optimizing DC inventory.
North America’s Largest Wholesalers Partner With Us to Optimize Dead Stock
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Are Your Inventory Forecasts and Lead Times Accurate?
Tiltmeter® detects unpredictable demand and supply changes quicker for higher accuracy, reducing dead stock and lost sales caused by stockouts.
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.
Most wholesalers believe they only have 2-3% dead stock but Thrive typically finds 10-20% dead stock. The reports run from the ERP systems generally only identify dead stock at a company level. Thrive looks at item item at each stocking location to identify inventory that is over 12 months of supply.
For wholesalers that sell product with shorter product life cycles (eg electronics), Thermostock can identify products with stock over 6 months of 9 months to find items that are not selling. This helps prevent overbuying and can trigger potential returns to the vendor.
What causes wholesaler dead stock?
Based on Thrive’s analyses of hundreds of North American wholesalers, we have discovered that up to 90% of dead stock comes for SKU’s that sell less than 10 times per year. For example:
- Items that are at the end of their product lifecycle. These items were in demand in prior years but due to new technology or recent competition, these items sell very slowly now at certain locations
- Parts. Wholesalers have to stock a lot of parts for equipment including older model equipment. It’s an extremely manual effort to review all the parts SKUs to analyze and determine whether to stock or nonstock each part.
- Special discount buys. Vendors often offer what seem like great deals to wholesalers. But wholesalers don’t have great tools to analyze if they sell enough of those SKUs so they often buy more inventory than they need because it seemed like a great deal.
- Exceptional sales
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.