To get rid of excess inventory, most companies simply sell their spare products at a discount. But one company is trying a different strategy – destroying them.
According to the article “BofA Donates Then Demolishes Houses to Cut Glut,” Bank of America plans to demolish 100 houses in the Cleveland area in an effort to reduce its huge supply of unsellable properties. The houses are either abandoned or foreclosed on, and they’ve been damaged to the point where it would be more expensive to repair them than to destroy them. Abandoned homes are a big problem for banks and communities for several reasons:
- They drive down the value of nearby homes.
- They make neighborhoods less attractive to homebuyers.
- They can be used for squatting, drug deals and other illegal activities.
If this strategy works in Cleveland, Bank of America and several other banks hope to implement it in several other foreclosure-ridden cities like Detroit, Chicago and Las Vegas.
A Less Messy Solution
I wouldn’t recommend this inventory control strategy for most companies. Not many can afford to bulldoze thousands of dollars’ worth of property. A less messy solution to the problem of excess inventory is using inventory control software. The great thing about this software is it helps you balance your inventory so you get just enough products to meet demand without winding up with too many.
As I discussed in an earlier blog post, the housing industry is struggling to recover from its inventory control misfires. By flooding the market with homes, homebuilders cheapened their products and suffered major losses as homebuyers lost interest. You can be smart and avoid this pitfall by using inventory control software to cut down on waste and keep your business running smoothly.
Get an inventory software demo to see how Fishbowl Manufacturing can offer constructive inventory control solutions.