Expert Insight: Gilmore's Daily Jab
By Dan Gilmore
Date: May 15, 2009

Supply Chain Comment: Funny Story about Slow Moving Inventory


Just Why are there So Many Pallets in this DC?

I hope you get a chance to read Materials Handling Editor Cliff Holste’s blog entry on dealing with slow moving SKUs in the DC. (See Are Your Slow Movers Killing DC Productivity?)

That reminded me of a funny story from earlier in my career.

I was doing some work on a potential new DC for a glass manufacturer, a division of a large and well known company. It produced drinking glasses, vases, etc., most of which were plain glass, but the company also did some silk screening work to add logos and other decorations to the glasses, most of which were promotional items for very large beverage companies, restaurant chains, or major events.

We had determined that the company would need roughly 54,000 pallet positions for the new DC, including growth. But the existing DC consistently had nearly that many pallets or more right now, and we couldn’t figure out why. The DC manager, who wasn’t wild about us being there frankly, didn’t offer a whole lot of help.

This was in roughly 1998. One morning, we were walking around the old existing DC, and in one rather large reserve storage area we saw some pallets of silk screened glasses.

I went up for a closer look. They were special Coca-Cola glasses for I believe the Kentucky Derby – the 1992 Kentucky Derby, that is. Some six or so years earlier.

We had found the mother lode. Everywhere, there were utterly obsolete pallets of product silk screened for an event or promotion that was long gone. Why were these still sitting in inventory? The company simply never wanted to take the inventory write-off. So they sat and literally collected lots of dust.

Turned out there was also quite a bit of non-silk screened product that was also obsolete, but still sitting there years later. It just wasn’t as obvious.

In peak periods, there were pallets in the aisles, and obviously productivity got hammered. But those pallets never moved.

So at least we had our riddle solved. I hope we are beyond this type of practice 11 years later, but I am not sure.

Are there still stories or practices like that out there? I would really like to know.


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Dan Gilmore is the editor of Supply Chain Digest.

Gilmore Says:

We had found the mother lode. Everywhere, there were utterly obsolete pallets of product silk screened for an event or promotion that was long gone.

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