distribution resource management. I generally recommend creating an incentive-based compensation plan
for the hunter of cash. I have seen companies that take
this advice pay anywhere from 10 to 50 percent of
the recovered dollars to this manager.
The high end of that incentive spectrum was given
by a client who had inherited a bunch of junk through
a recent acquisition. Although he didn’t pay anything
for the inventory, he had to rent an auxiliary warehouse
at $3,000 per month to house the junk. He wanted to get
out from under the monthly rent as quickly as possible.
Even after paying the inventory manager a 50 percent
incentive for liquidating the dead stock, he came out
ahead. The 50 percent he picked up on the liquidation
Remember, for an incentive to work, it has to be
meaningful. A 2- or 3-percent incentive isn’t going to
cut it. If you want meaningful change, you have to pay
A good dead-stock manager (or “cash-recovery agent,”
if you prefer that term) will help you meet an aggressive
timetable. It is important to bring that manager in on the
planning side. Set realistic goals and make sure to check
in with him/her on a monthly basis. There will be bumps
and obstacles along the way. You don’t want to get caught
flat footed at the end of the year. Good planning gives you
the ability to make adjustments.
Although I am stressing the importance of a timetable in the management of dead stock, I am sure you
see this principle’s universal application. Whatever your
The really successful companies
make inventory reduction and
cash recovery the primary
responsibility of a single person.
“Blackmer DEF pumps get the job done
each and every time, ensuring material
compatibility, optimized performance,
reliability and low maintenance.”
Contact your authorized Blackmer distributor today.
WhereInnovationFlows. Concerned About DEF Contamination?
Jerry Brenner, Co-Owner, Brenner Oil
Holland, MI, USA
STX-DEF Series Pumps
1809 Century Avenue S W,
Grand Rapids, MI 49503-1530 USA
T 616.241.1611 F 616.241.3752
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