With the recent downturn in the economy, many businesses are looking for other means to generate revenue and maximize efficiency. They have become better at managing inventory, managing waste, and maximizing returns through the use of asset recovery, surplus inventory management, and recycling.
How does a company manage inventory better?
There have been tremendous improvements with software technology with ERP systems such as SAP and Oracle ERP applications over the past years. But, what happens when you have the best software technology, you have implemented just-in-time programs to reduce excess inventory, and management is still asking you to do better. Companies are turning to non-traditional methods to generate revenue and become more efficient such as asset recovery programs, scrap metal recycling, off-loading excess inventory, and selling seldom used machinery and equipment. For example, a warehouse company in Colorado just implemented a just-in-time program to reduce inventory. They were no longer making products that went to inventory where it rested there until it was needed or sold. Their just-in-time program caused a paradigm shift at the company. Now, they were making product only when the orders were processed.
This tremendous changed allowed the company to save in insurance cost, overhead, and administration costs. On another level, the company did not need as many forklifts, storage racks, and other warehouse equipment. By contracting an industrial surplus company, this Colorado company was able to sell the forklifts, storage racks, and warehouse equipment for additional revenue. This is one example of non-traditional methods to generate revenue.
A pipe-making company in Houston, Texas threaded steel pipes on a daily basis. Tons of pipe was threaded by the day. When a pipe is threaded, the pipe is cut, trimmed, and tapered at each end of the pipe causing metal to be cut-away from the pipe. This Houston based company was generating a lot of steel scrap metal for each threaded pipe. For years, the company worked to melt and re-use the threaded excess of steel material. The metal was often sharp and hazardous to handle, causing an additional safety risk. The added value of re-using the excess steel metal from the threaded pipe proved to be expensive and risky. Eventually, they partnered with a scrap metal company and began to sell the excess metal to the scrap metal company. What was once a liability, both financially and hazardously, instantly became an asset and an additional revenue stream for the company.
It is these non-traditional methods of generating revenue and becoming more efficient that has allowed many companies to survive and some to thrive in this slow economy. “Leave no rock un-turned” is an old saying, but it fits this article. Companies are finding more and more ways to generate revenue and become efficient that they are looking underneath every rock or machine, every stone or equipment to see if it can be of additional value.
In conclusion, a simple partnership with a good surplus management company can possibly help your company to generate additional revenue. Surplus companies know what materials, equipment, and assets still have value. Their experience in the re-sale market could become a benefit to your company.
For help assessing your companies inventory, waste management, and asset recovery contact an industrial surplus company, today.