Inventory Management Services Customized for you!
This is where we discuss your inventory challenges and goals. Lippert has over 40 years of experience and numerous OEM partners, and we have met a variety of inventory needs. We can help you achieve your goals; whether that means improving delivery time, streamlining dealer returns, or better managing warehouse space.
With an understanding of your goals and challenges, we can start planning your specialized inventory solution. Through collaboration, we will identify which Lippert services will best meet your needs.
Now that we've developed a plan, our partnership will flourish as we help you accomplish your inventory goals. Lippert offers custom reports, so you will be able to track the progress and improvement of your inventory management along the way.
In every industry, the goal is to continue growing. Stagnation or lack of growth is often viewed almost as badly as regressing. With growth being such a vital metric that businesses live or die by, inventory should be viewed as a potential limiting factor to growth. When reviewing inventory and conducting inventory audits the focus is on the hot ticket items and fast movers. Why pay for storage of slow-moving or obsolete inventory when those resources could be utilized to store faster-moving inventory? The first question when looking at auditing your inventory is how to identify slow-moving inventory to then replace it with faster-moving inventory. Below are 4 ways of identifying slow-moving inventory:
1. Inventory Turnover
Turnover rate measures how quickly products are moving from the warehouse or storage to your customers. A high turnover rate means that demand for the product is high – it is not held or stored very long before it is sold. A low turnover rate means that a product is being stored for a long period of time before being sold. In a nutshell, inventory turnover shows how much a company has sold and replenished inventory over a specified length of time.
Investopedia states that the formula for identifying inventory turnover is as follows:
Inventory Turnover = Sales / Average Inventory
Low turnover indicates excess inventory, while high turnover may indicate strong sales or insufficient inventory.
2. Holding Costs
Holding costs is the total cost it takes to store your inventory. Warehousing costs are often the first cost that comes to mind, but other costs should be considered such as depreciation, insurance, staffing, and any other costs associated with the inventory. Continuing to use capital towards supporting inventory should only continue if the gross profit is greater than the holding cost of the inventory. Inefficiencies may still exist, even if a profit is being made. If other higher-demanded inventory exists, resources should be used to support the faster inventory and no new resources should be invested into the older inventory.
3. Days Sales of Inventory (DSI)
Days Sales of inventory is described by Investopedia as “a financial ratio that indicates the average time in days that a company takes to turn its inventory, including goods that are a work in progress, into sales.” Investopedia gives the following formula for DSI:
DSI = (Average Inventory / Cost of Goods Sold) * 365 Days
As DSI is the inverse of Inventory Turnover, a high DSI value means lower turnover and a low DSI value indicates higher turnover. DSI will give you an average number of days it takes for a company to sell the inventory being measured.
Forecasting is a technique that uses past data to make estimates of the direction of future trends for a business. Forecasting can be used to discover patterns or predict future inventory turnover. Using forecasting to predict the demand and turnover rate is helpful for a business in discovering future products that may become slow-moving or estimate the usable life-span of their inventory.
Once slow-moving and obsolete inventory is identified, the next question is what should be done with it? Often companies will scrap their slow-moving inventory so they can get a small sum of capital as they bring in larger quantities of faster-moving or new inventory. For heavy equipment/highway truck manufacturers (or any industry where your inventory consists of spare parts for your previous products), scrapping can create distrust with your customers. As parts are scrapped, the supply of spare parts is diminished; which increases the price of remaining spare parts. For more information on the negative effects caused by scrapping inventory, check out our article “How Scrapping Inventory Can Damage Brand Loyalty.”
Lippert Enterprises provides an alternative to scrapping inventory that keeps brand loyalty and inventory availability high, while simultaneously accomplishing a company’s inventory reduction goals. Selling your inventory to Lippert provides your business immediate capital (more than what scrapping would provide) while keeping the inventory available to your customers.
When our founder Larry Lippert began buying obsolete and slow-moving inventory from on-highway truck and heavy equipment manufacturers in 1976, he was pioneering a revolutionary inventory management model that changed how businesses handle their aging inventory. For over 40 years, we have helped on-highway truck, construction, mining, forestry, agriculture, and crane OEMs improve their delivery times, streamline dealer returns, and free up warehouse space.
At Lippert, we believe that business solutions should not be short-sighted; they should be deliberately designed to minimize the long-range negative effects caused by tactics designed to meet short-term business objectives. We aim to help your business achieve financial goals of inventory reduction while mitigating conflict that usually results from decreased supply and capacity to service customers.
We also offer various 3PL Services, such as Legacy Parts Management, Packaging & Co-Packaging, Kitting, and Government Sales Management.
Our Mission Statement: Lippert Enterprises, Inc. aims to extend the life of inventory. This is achieved by offering flexible solutions to our partner networks. Lippert creates a sustainable future for our customers, employees, community, and shareholders through collaboration, active leadership, continuous improvement and the highest standards of integrity.
To learn what we can do for your business, contact us here!
It is important to shop around when looking for a partner to meet your logistic needs. The differences between 3PLs and 4PLs can be confusing as the lines between the two often blur. Below is a short description of the different types of logistics, with an example for each. While this breakdown is a general idea of how the different logistic types work, each logistics business operates in its own manner. Research and discussion should be done with potential 3PL and 4PL partners to learn what services they offer and which provider will be right for your organization.
First Party Logistics (1PL):
A 1PL is when a business handles transportation and logistics needs in-house. A local farm delivering milk to a convenience store would be an example of a 1PL.
Second Party Logistics (2PL):
A 2PL is a business that specializes in the transportation of products from one location to another. A local lumber-mill hiring a transportation company to deliver their wood to a hardware store is an example of a 2PL.
Third Party Logistics (3PL):
A 3PL is when a company specializes in the storage and transportation of product for another business. A 3PL may also oversee packaging and crating of product, and sometimes offer additional services as needed. 3PLs are usually asset-based but may subcontract out pieces of the logistics, such as transportation. 3PLs also may have more than one point of contact when referencing the supply chain. An example of a 3PL would be a manufacturing company contracting out the transportation, packaging, and warehousing of their product.
Fourth Party Logistics (4PL):
Like a 3PL, a 4th Party Logistics will oversee the transportation, packaging, and storage of a business’s product, but they will also give strategic direction to the business based on analytics. Often 4PLs are non-asset based and shop around for different vendors to complete a supply chain for the best value. A 4PL generally has one point of contact for everything referring to the supply chain. For example, an adhesive manufacturer that hires a 4PL will have their supply chain needs met with little to no involvement. The 4PL would offer strategic advice, such as suggesting to increase glue production based on market trends.
Which is Best for My Business?
If a business needs logistical support, they may be stuck deciding between a 3PL and 4PL provider. If your business is capable of researching market trends and conducting statistical analysis in-house, then the extra services offered by a 4PL may not be needed. There is no reason to pay for analytic support and advice if a business’s team is already handling it themselves. If a business does not have the capability to conduct the analytical research, then a 4PL may be desirable as it can offer insight that the business otherwise would be missing.
Lippert Enterprises offers various 3PL Services, such as: Legacy Parts Management, Packaging & Co-Packaging, Kitting, and Government Sales Management. To learn how Lippert can help you achieve your inventory needs, contact us here!
Call your Lippert Partner Services Associate to help you determine what Flexible Inventory Solutions will help you manage your inventory, deliver far greater access to parts and improve brand loyalty.
map 1327 Faultless Drive Ashland, OH 44805
call +1 419.281.8084