Disposal of obsolete or dead Stock and SCMluxe

Obsolete stock or dead stock is the bane of all supply chains and traditional industries have evolved innovative ways of dealing with this. In this article we’ll discuss what is to be done with existing obsolete stock and not on ways to reduce it.

Obsolete stock?

Obsolete stock is managed in traditional supply chains by:

1.       Disposing off vide discount sales

2.       Refurbishment (seen especially in home electronics industries)

3.       Stripping and recycling parts of the product to recover as much value as possible

4.       Lastly responsible disposal (landfill, incinerators etc)

In SCMluxe these options don’t really work:

1.       Discounts or Sales: No discount or sales offered in the luxe industry since this will affect the brand and the more loyal customers

2.       Refurbishment: This would mean that the quality of the product was not of the highest level earlier, again a violation of a luxe product’s positioning

3.       Stripping for parts and recycling: Gives raise to fears of counterfeiting and brand logo/recognition appearing on non-luxe products

The only option left to most luxe houses is then to dispose off obsolete stock in landfills or incinerators. Another method is to donate obsolete stock to a carefully controlled but worthwhile cause which might result in some publicity as well as disposal of stock. Are there any other ways or strategies that luxury houses use to dispose dead stock? Do let me know….