Inventory or White Elephant?

We have just cleared over 500 pallets of redundant cardboard boxes from a company who had the material stored at their logistics company for over 5 years!

During that period no one had the courage to write off the material which showed a substantial value on the balance sheet. Rather than cause an inquest as to why such a monumental overstock had occurred the company continued to pay storage costs.

A new material controller for the company discovered the anomaly and the proverbial hit the fan!

Although we are helping to divert the material to reuse and are paying substantially higher rates than waste paper processors, over a third of the material has deteriorated to such an extent that it will have to be scrapped.

The storage costs and scrap disposal costs are substantially higher than the original value.

The moral of the story is to deal with obsolescence as it arises, whilst uncomfortable at the time it is by far the cheaper option. Be brave and deal with it!