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Distributors Get Rid of Dead Stock

Nov. 1, 2003
Quality Mill Supply, an Indiana-based MRO distributor, and Action Industrial Supply, a Michigan-based general industrial supplier, have found a solution

Quality Mill Supply, an Indiana-based MRO distributor, and Action Industrial Supply, a Michigan-based general industrial supplier, have found a solution to the age-old dilemma of how to get rid of costly dead stock: Prophet 21's Trading Partner Connect.

Although it was engineered to streamline the commerce process between distributors, their manufacturers/suppliers and end-users, an added bonus of the Internet trading network is its power to reduce dead stock in distributors' warehouses.

“Trading Partner Connect's ability to help distributors with the issue of dead stock came as a pleasant surprise,” said Chuck Boyle, Prophet 21 president and CEO. “It wasn't until after members had started trading on it that they came to us and said that Trading Partner Connect had the potential to solve this nagging issue. We were more than happy to work with them to develop the functionality.”

Recently, Quality Mill Supply received a Trading Partner Connect-generated list of inactive stock items available at deep discounts from other distributors. They found several items they needed — mostly abrasive products — offered by Action Industrial Supply.

Earl Hubbard, inventory control manager at Quality Mill Supply, contacted Todd Panici, operations manager at Action Industrial Supply, about those products. During their discussion, Panici realized that Quality Mill Supply had several rolls of an abrasive belt needed by one of his customers, a product Action Industrial Supply had recently run out of.

As it turned out, those belts happened to be dead stock for Quality Mill Supply. Panici estimates that he saved at least 25 percent on the $2,500 purchase, boosting his bottom line. “And, we got one of our customers out of a jam,” he added. The transaction also saved Quality Mill Supply a trip to the liquidator. “We would have only gotten 5 to 10 cents on the dollar for those items,” Hubbard said.

Although Action Industrial Supply is relatively new to Trading Partner Connect, Quality Mill Supply has been a member of the Internet trading network since its inception in April 2001.

“Joining Trading Partner Connect has more than paid for itself,” Hubbard said. “We've received a complete return on our investment. Already, we've sold almost $30,000 worth of dead stock on the network and have probably bought more than $20,000 from other distributors. We use it day in and day out.”

Panici also predicts that Action Industrial Supply's investment in Trading Partner Connect will soon pay off.

“I can see our dead inventory dropping by 30 or 40 percent,” said Panici, “which is excellent, because in the past it wasn't going anywhere.”

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