Because of the current economic conditions, many distributors are suffering from decreased sales and lower profit margins. While there is less money available to invest in inventory, to remain competitive distributors must maintain a high level of customer service. In this economic climate, it’s critical that every dollar invested in inventory is working to achieve the goal of effective inventory management.

When forced to reduce inventory many distributors first look to get rid of dead stock and remove slow-moving inventory from warehouse. But this course of action presents several challenges: