Inventory Shrinkage from Overproduction and Scrapping Slow-Moving Size SKUs
Definition
High MOQ size run planning locks cash in slow-moving SKUs, leading to excess inventory that gets discounted or scrapped, mimicking shrinkage losses. This systemic risk in footwear turns 'efficient' large runs into hidden waste as unallocated fringe sizes pile up. Poor allocation without size curve analysis amplifies unrecoverable stock.
Key Findings
- Financial Impact: Margin erosion from discounted/scrapped inventory (quantified in industry patterns)
- Frequency: End-of-season recurring - tied to each planning cycle
- Root Cause: Rigid high-MOQ without SKU segmentation or time-phased profiling, ignoring regional size demand variations
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Footwear Manufacturing.
Affected Stakeholders
Inventory Allocators, Demand Planners, Warehouse Managers
Deep Analysis (Premium)
Financial Impact
$10,000-$40,000 per product line in missing sample costs and catalog gaps; customer complaints from incomplete size options; Potential lost sales from missing size imagery • $10,000-$50,000 per quarter in lost sales from unavailable sizes, returns processing costs, and customer dissatisfaction; Margin erosion from size-mismatch returns • $100,000-$300,000 per season from forced markdowns on fringe sizes and regional overstock; inventory carrying costs on dead size SKUs represent 15-20% of total DC costs
Current Workarounds
Coordinator maintains manual size validation checklist; Discrepancies emailed to brand partner and factory; Rework requests tracked via email chain or shared document • Coordinator tracks incoming packing lists in Excel; Size imbalances manually noted and reported to buyer via email; Manual store routing adjustments • Coordinator tracks sample receipt by size in spreadsheet; Size gaps flagged to content team via email; Manual requests to factory for fill-in samples or photo reshoots
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Line Downtime and Capacity Waste from Frequent Size Run Changeovers
Excessive Production Costs from Unstructured Low MOQ Size Runs
Quality Defects from Inconsistent Size Grading and Small Batch Variability
Misclassification of Footwear Leading to Incorrect Duties and Penalties
Customs Delays from Documentation Errors Causing Demurrage and Storage Fees
High Defect Rates from Manufacturing Errors in Returns Analysis
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