Differences Between Fast Moving and Slow Moving Stock and How to Optimize Them

The dynamic market demand makes the circulation of stock in the warehouse unpredictable. There are products with high demand, causing high product turnover. This is commonly known as a fast moving product. On the other hand, there are also products that are less desirable in the market, resulting in low turnover, also known as slow moving products.

Definition of Fast Moving and Slow Moving Stock

Definition of Fast Moving Stock

Fast moving stock refers to products that have a high stock turnover rate. This indicates that products in this category are frequently ordered by consumers. This category is generally filled with items that have high demand, such as basic necessities or popular goods that run out quickly.

Definition of Slow Moving Stock

Meanwhile, slow moving stock refers to products that have a low turnover rate. In this category, these products are rarely sold and tend to remain in the warehouse for a long time. Slow moving stock can be caused by various factors, such as low demand, lack of popularity, shifting trends, or seasonal characteristics.

Differences Between Fast Moving and Slow Moving Stock

To identify the differences between fast moving and slow moving stock, consider the following aspects:

1. Stock Turnover Rate

As mentioned earlier, fast moving stock has a high turnover rate. This requires companies to replenish stock before warehouse inventory runs out. Meanwhile, slow moving stock has a low turnover rate, causing products to remain in the warehouse longer due to infrequent purchases.

2. Market Demand

With high turnover, fast moving products have high and consistent consumer demand, causing stock to sell out quickly. On the other hand, slow moving stock typically stays longer in storage due to lower market demand.

3. Impact on Inventory

If not managed properly, fast moving stock may lead to stock shortages. Companies must carry out stock replenishment before inventory levels become critical. For slow moving stock, the impact includes increased storage costs and the potential for dead stock. Therefore, companies must plan well to avoid storing slow moving items in large quantities.

4. Impact on Company Cash Flow

Stock with high demand — fast moving products — contributes to faster cash flow because the products are sold quickly. Meanwhile, slow moving products hinder cash flow because capital remains tied to the unsold inventory.

5. Risk Level

From a risk perspective, fast moving products have lower financial and operational risks because demand is high and products sell quickly. On the other hand, slow moving products carry higher risk because they stay longer in the warehouse, increasing operational costs, and risk of expiration or becoming dead stock.

Characteristics of Fast Moving Stock

Here are several characteristics of fast moving stock:

1. High consumer demand, indicating that products are frequently purchased and always needed.

2. Short warehouse storage duration due to high order volume.

3. High sales volume leading to rapid product turnover.

4. Companies must frequently restock to avoid stockouts.

Characteristics of Slow Moving Stock

Here are several characteristics of slow moving stock:

1. Low consumer demand, meaning products are rarely sold and have fluctuating demand.

2. Long warehouse storage duration because there is little demand.

3. Low sales volume resulting in slow product turnover.

4. Less frequent restocking due to low market demand, helping prevent excessive warehouse stock buildup.

How to Optimize Fast Moving and Slow Moving Stock Through Inventory Software

Inventory software helps companies optimize all inventory stored in the warehouse. Both fast moving and slow moving items can be managed properly to minimize risks such as stockpile buildup, dead stock, and increased operational costs. Here's how inventory software optimizes both product categories:

1. Real-Time Stock Monitoring

Implementing inventory software allows real-time monitoring of stock availability. This helps companies know stock levels, stock conditions, and stock needs.

2. Warehouse Management Automation

One of the main advantages of using inventory software is warehouse operational automation. Several processes can be automated, such as order processing, inventory replenishment, stock opname, and warehouse performance reporting.

3. Demand Forecasting

Inventory software can collect and manage warehouse operational data more accurately. This helps companies develop demand forecasting based on sales trends and historical records, allowing stock adjustment to meet demand accurately.

4. Storage Optimization

With inventory software, companies can optimize warehouse storage by placing fast moving items in easily accessible areas for faster picking, and placing slow moving items in remaining storage areas, while still monitoring them to avoid dead stock.

5. Slow Moving Stock Handling Strategies

Based on inventory data, companies can identify slow moving items and develop optimization strategies, such as reducing or temporarily halting stock procurement. Companies may also create specific sales strategies such as discounts to accelerate sales of slow moving products.

By optimizing fast moving and slow moving stock with inventory software, companies can minimize risks that may lead to losses. All processes will be automated, making warehouse operations more accurate and efficient.

As an inventory software provider, Prieds offers solutions for managing both fast moving and slow moving products through a customizable integration of software and hardware to meet company needs. You can learn more about optimizing fast moving and slow moving stock through consultation with our expert team. Get software equipped with complete features, top security, and user-friendly functionality tailored to your business needs with Prieds.