Uncovering ₹2.5 Crore in Hidden Dead Stock Through Smart Inventory Management
The Challenge
A large distribution company believed their dead stock was worth approximately ₹1 crore — a number they were uncomfortable with but had accepted as part of doing business. The real problem was deeper: without a proper inventory management system, they had no visibility into what was actually sitting in their godowns. Products were being purchased even when existing stock was available in a different warehouse. Items were being sold at incorrect prices because stock data was outdated. The team relied on memory and physical counts, which happened only once a year.
Our Solution
We implemented a comprehensive inventory management system that connected all godown locations in real-time. Every stock movement — purchase, transfer, sale, return — was tracked digitally. The system introduced barcode scanning for accurate stock counts, automated reorder points based on sales velocity, and dead stock alerts for items that hadn't moved in 90+ days. We also built a purchasing workflow that checks existing inventory across all locations before allowing new purchase orders, preventing duplicate purchasing.
The Outcome
The first complete digital stock audit revealed the shocking truth: actual dead stock was over ₹2.5 crore — 2.5 times what the management believed. Products worth crores were sitting in godowns while the purchasing team was buying the same items again. After implementing the system, duplicate purchasing dropped by 90%. Dead stock was identified and systematically liquidated through targeted offers. Within 8 months, the company recovered over ₹80 lakhs from dead stock sales and saved ₹1.2 crore annually in prevented duplicate purchases.
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