What is a KanBan Stocking Contract?

Kanban is “signal” in Japanese. A Kanban stocking contract allows you to maintain only enough inventory to produce the products you need in the near future. As you need more inventory, your suppliers will deliver a new shipment. Generally, KanBan stocking contracts allow for weekly, even daily deliveries as long as you have established schedule arrangements with your suppliers. Aspen Sales is a stocking rep that provides Kanban stocking contracts in California as well as KanBan stocking contracts in Utah.

The Advantage of KanBan stocking contracts

The main advantage of entering into  KanBan stocking contracts is inventory reduction. A reduction in inventory, allows capital to be used in other areas of the company. Also, it alleviates the financial loss associated with the depreciation of stock. As a manufacture stocking rep, Aspen Sales will ensure you have the stock you need without purchasing advance quantities only to sit in a warehouse to depreciate.

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If you purchase inventory and the demand for your product declines, you continue paying for your inventory far beyond the 30 day invoice. KanBan stocking contracts in California allows you to reverse the daily cost by purchasing only what is needed to complete current and upcoming orders. The smaller amount of time these products stay in your inventory, the more money you save.

(Contributing Author: Anita Turner)