Excess and Obsolete Inventory

The value of inventory above forward requirements or no longer sellable.

Excess inventory ties up cash, consumes space and eventually becomes a write-off that hits the income statement.

1.4M excess and obsolete against 20M total inventory = 7%.

Split excess (sellable but over-covered) from obsolete (not sellable). They need completely different actions.

Set coverage ceilings per segment, review ageing monthly, stop replenishment on flagged items, and run disposition through a standing committee.

Reporting only obsolescence reserves, which lags the operational problem by months.