FreeFlow disposition options keep inventory moving in harmony with the sales channel

When SanDisk, a Milpitas, Calif.-based manufacturer of flash storage card products, received MP3 players back from its sales channel, it sought to clear the inventory rather than hold it or reprocess it. It turned to inventory asset management services provider FreeFlow for assistance. “As is often the case in such situations, manufacturers want to differentiate these types of products f...
By Staff October 1, 2007

When SanDisk , a Milpitas, Calif.-based manufacturer of flash storage card products, received MP3 players back from its sales channel, it sought to clear the inventory rather than hold it or reprocess it. It turned to inventory asset management services provider FreeFlow for assistance.

“As is often the case in such situations, manufacturers want to differentiate these types of products from those being sold in the primary channel,” says Bill Paganini, SanDisk senior director. “FreeFlow worked with SanDisk to determine the product differentiation, conducting the work in its San Jose material-handling facility. The units were auctioned and sold within 72 hours. All settlement administration was handled by FreeFlow.”

FreeFlow’s unique inventory liquidation model allows companies like SanDisk, Apple, and Motorola to outsource the task of establishing the highest price that the secondary market will bear, and processing all the administrative overhead and material handling.

“We’re involved in the product profitability life cycle,” says Alan Scroope, FreeFlow CEO. “We developed an auction platform and tools to support the administration that goes with it, allowing manufacturers to outsource the burden of auctions to us.”

FreeFlow handles all material processing for the Americas at its San Jose facility. It has another facility in Ireland to serve Europe, the Middle East, and Africa; and one in Vietnam to serve the Pacific Rim.

“Companies often contact us at quarter’s end to take their inventory into our facilities, conduct the auction, and maximize recovery,” Scroope says. “They don’t have time to do it. We act as the administrative clearinghouse.”

It’s an offer companies find hard to refuse. “It’s a question of how to get rid of inventory with the least amount of pain,” says Dwight Klappich, a VP with Stamford, Conn.-based Gartner . “In the past they’ve often ended up just sitting on it because they don’t want to write it off and ruin a quarter’s performance. If you can recoup a portion of it, that’s better than writing off 100 percent.”