Dead inventory vs slow movers: different problems, different actions

Finance asks to reduce inventory. Operations worries about stockouts. The argument stalls because dead stock and slow movers get lumped together.

Dead inventory

Typical definition: no sales in 90+ days (adjust for seasonality in your category), quantity on hand above zero, and no firm demand signal (open quotes, contracts). Action: stop-buy, bundle, return, or liquidate — in that order of preference.

Slow movers

Still selling, but cover exceeds target — often 60–90+ days of supply at current velocity. Action: reduce reorder size, transfer between branches, or promo before the line becomes dead.

Why the distinction matters

• Dead stock traps cash with low recovery probability — speed matters
• Slow movers still have demand — aggressive clearance can destroy future margin
• Purchasing rules differ: dead = hard stop-buy; slow = reduced MOQ or frequency

Quantify the trap

Estimate cash trapped: on-hand qty × unit cost for each flagged line. Rank by cash, not SKU count. Leadership approves a monthly clear-down budget against that ranked list.