Introduction
In the Food, Pharma, and Nutraceutical industries, efficient inventory management is not just a supply chain concern—it’s a critical financial lever. Yet, many businesses overlook the invisible losses occurring due to non-moving, expired, or surplus inventory.
Inventory Losses: A Silent Drain on Your Bottom Line
Recent estimates show that companies lose 0.75% to 1% of their total inventory value annually due to various handling and planning issues. These aren’t just operational losses—they directly affect profitability, working capital, and space utilization.
For a company with ₹100 crore in inventory, that’s a potential loss of ₹75 lakhs to ₹1 crore every year.
Common Causes of Inventory Losses
Here are some key pain points faced by CFOs, Commercial Heads, and Business Owners in managing inventory effectively:
Expiry or Loss of Shelf Life
Materials expire or become unusable due to poor visibility and lack of periodic feedback.Even when MIS systems exist, delayed or uncoordinated actions lead to preventable wastage.
Procurement Without Shelf-Life Check
Materials are procured without ensuring a minimum required shelf life (typically 70%).Short-shelf-life items are bought under strategic buying or safety stock without proper planning.
Forecasting Errors
Inventory is bought based on anticipated orders or sales forecasts that don’t materialize.Orders are split or cancelled, leaving raw materials unused and aging in storage.
MOQ-Driven Surplus
Minimum Order Quantity (MOQ) purchasing results in leftover materials that go unused before the next production cycle.This is common in both raw materials and packaging components.
Unaligned Procurement & BOM
Procurement teams sometimes order excess materials not aligned with the actual Bill of Materials (BOM).BOM changes are made without considering existing leftover stock.
Multiple Variants of Same Item
Businesses procure the same material in different variants or makes, often due to client approvals.These remain unused and sit as dead stock, despite being interchangeable in other products.
Store-Level Mismanagement
Poor enforcement of FIFO (First-In-First-Out) or FEFO (First-Expiry-First-Out) leads to older stock expiring.Indents are placed without checking existing surplus in different material codes.
No Disposal Strategy
Most companies lack a system or marketplace for selling non-moving, surplus, or near-expiry inventory.As a result, these materials get written off or discarded, creating a double loss—loss of capital and additional disposal cost.
Why This Can't Be Brought to Zero—But Can Be Controlled
We understand that some level of inventory loss is inevitable due to dynamic regulations, client demands, and operational complexities. But that doesn’t mean it can’t be controlled or minimized.
By implementing strategic checks, improving interdepartmental coordination, and adopting a disposal plan, companies can recover significant value from inventory that would otherwise go to waste.
How BlueLotus Value Tradelink Can Help
At BlueLotus Value Tradelink Pvt. Ltd., we specialize in helping companies monetize their non-moving, surplus, or near-expiry inventory through:
- ✅ A dedicated marketplace for surplus materials
- ✅ Access to verified buyers and alternate users
- ✅ Recovery of value from dead stock
- ✅ Assistance in clearing warehouse space
- ✅ Improving inventory turnover ratios
- ✅ Promoting sustainability and waste reduction
Our mission is simple:
To turn your idle inventory into working capital.
Stay Tuned
In our next blog, we’ll cover:
“Top 10 Control Measures to Minimize Inventory Losses – From Procurement to Disposal.”
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Let’s Talk
Is your business sitting on non-moving or surplus inventory?
Don’t let it become a loss—turn it into value. We are coming soon with a power resolution tool & a marketplace, stay tuned.
📞 Contact us: Siddharth@blulotuss.com | Contact: 7807176087
🌐 Website: blulotuss.com
📍 Company: BlueLotus Value Tradelink Pvt. Ltd