Partstat Loves Slow-Moving Inventory — And We Want to Buy Yours!By Logan Wamsley
Ideally, OEMs, EMS providers, and authorized distributors alike want their inventory to move fast. The quicker the inventory moves, the quicker the company receives adequate return on their investment and frees up any capital that may have been tied up.
In reality, however, things rarely go according to plan. Quite often, circumstances outside of the company’s control require on-hand inventory to move at a glacial pace, which as a result accumulates significant carrying costs and could potentially tie up substantial amounts of limited warehousing space, not to mention taxes, insurance costs, and handling and administration fees. In extreme cases, depending on the industry in question, critical inventory purchased as part of a last time buy may be required to sit ten, fifteen, or even twenty-plus years.
Such a situation is even more perilous for particularly sensitive electronic inventory. Many OEMs and authorized distributors, for example, simply do not have the infrastructure needed to securely warehouse sensitive, specialized inventory without compromising the inventory’s ability to perform optimally at the point of assembly.
While these companies in question may not love the idea of slow moving inventory, Partstat does, and we want to help you with yours!
Using one of Partstat’s unique solutions and letting us manage all of the hidden costs of holding inventory (insurance, taxes, storage costs, risk loss, handling and administration costs, etc.), customers have it within their ability to avoid these many costly supply chain risks so they can concentrate on their core business — and use the generated revenue to fulfill initiatives that perhaps may have once seemed unattainable.
There are a few ways this can be accomplished. First, Partstat can purchase inventory directly off of the balance sheet of OEMs, EMS providers, and authorized distributors alike with buyback payment terms spread out over terms as long as twenty years. This allows the customer to realize immediate cash while Partstat houses the inventory and takes care all applicable shipping and handling responsibilities. Also, in the case of EMS providers and authorized distributors, the payment obligation can seamlessly be transferred to the OEM, which is much more manageable with twenty-year terms and will not create unnecessary friction between parties.
The second option available to customers is a go-forward strategy where Partstat will immediately purchase any necessary last time buy inventory directly from the component manufacturer right when a LTB date is issued, as well as store it. This insulates the customer supply chain from any last time buy-related risk for the entire lifecycle of the OEM product, all while preserving working capital and saving customers an average of 42% in annual carrying costs. Whenever the inventory is needed, Partstat will immediately pick, pack, and ship it to the necessary facilities anywhere in the world in accordance with a delivery schedule personalized for the customer.
Slow-moving inventory does not have to be a hindrance. In fact, when leveraging one of Partstat’s solutions, it can be a means to unlocking the potential of tied up, long-dormant capital. What you do with your newfound cash flow is up to you, but no longer does it need to be tied up in product that may not be needed for several years. Let us take it off your hands!