Slow-Moving and Obsolete (SLOB) Inventory Liquidation Automation

Manual SLOB processes can take weeks, tying up capital in non-performing assets. An automated workflow continuously identifies aging stock, evaluates the optimal liquidation channel, and initiates the disposition process within hours. This converts dead inventory into working capital 60-80% faster, while simultaneously eliminating monthly storage and insurance costs that erode margin.

Manual liquidation often defaults to a single, suboptimal channel (e.g., bulk liquidation at deep discount). A custom agent evaluates each SKU against multiple channel-specific pricing APIs (secondary B2B markets, discount retailers, donation partners, recycling) in parallel. It selects the channel offering the highest net recovery after fees, shipping, and handling, systematically improving average recovery value by 20-40%.

The traditional SLOB process involves manual report generation, spreadsheet analysis, email negotiations, and document creation. An automated workflow orchestrates data extraction from ERP aging reports, applies business rules for channel eligibility, generates necessary documentation (e.g., certificates of destruction, donation letters), and updates financial records. This reduces dedicated FTE effort by 70-90% and eliminates costly data-entry errors.

Improper disposal of regulated or hazardous SLOB inventory carries significant fines and brand damage. The workflow integrates compliance databases and product material data to route items through approved, auditable channels. It automatically generates and archives the full audit trail—from identification to final certificate—ensuring defensible compliance and supporting ESG reporting goals by optimizing for donation or recycling over landfill.

SLOB is a lagging indicator of forecasting and buying failures. An automated liquidation system feeds disposition reasons and velocity data back into demand planning and merchandising systems. This creates a closed-loop feedback mechanism, helping planners identify problematic categories or suppliers earlier. Over time, this reduces the volume of future SLOB creation by 10-25%, protecting future margins.

Manual processes don't scale. A custom, API-driven workflow built with orchestration frameworks like LangGraph or temporal.io can handle a 10x increase in SKU volume or channel complexity without proportional headcount growth. The system's capacity is defined by cloud infrastructure, not human labor, creating a capital-efficient operating model for inventory management as the business grows.

This component continuously analyzes inventory aging reports, sales velocity, and seasonality from the ERP (e.g., SAP, Oracle) to flag SKUs as SLOB based on configurable thresholds. It integrates with demand planning systems to differentiate between temporarily slow and genuinely obsolete stock, preventing false positives. The agent tags each item with a lifecycle stage and predicted markdown cost, creating a prioritized queue for the disposition engine.

A central orchestration agent (built with frameworks like LangGraph or CrewAI) evaluates each SLOB item against multiple liquidation channels. It calls external APIs for secondary market pricing (e.g., B-Stock, Liquidation.com), checks discount retailer program rules, and assesses donation/tax credit eligibility. The agent uses a rules engine to score each channel based on recovery value, speed, and cost, then routes the item to the optimal channel, generating a disposition recommendation.

Upon approval, this component executes the channel-specific disposition process. It generates necessary documentation (e.g., lot lists, certificates of destruction, donation manifests), creates sales orders or transfer orders in the ERP, and updates inventory statuses. For B2B secondary market sales, it can interface with platform APIs to list lots automatically. All actions are logged for audit, and the system reconciles expected vs. actual outcomes.

Critical for financial control, this component manages exception routing and approval gates. High-value lots or non-standard dispositions are automatically routed through a configured workflow in a system like ServiceNow or directly within the orchestration layer, notifying finance, merchandising, or legal stakeholders. The system enforces segregation of duties, captures approval rationales, and maintains a complete audit trail from identification to final settlement.

This observability layer tracks KPIs like total recovery value, cost avoidance, and cycle time by channel and category. It feeds results back into the identification engine's algorithms, helping refine SLOB classification thresholds. Dashboards provide ops and finance teams with visibility into cash recovery and working capital impact. The system also monitors for process exceptions (e.g., failed API calls, reconciliation mismatches) and alerts engineering teams.

A practical implementation challenge is connecting to legacy WMS, 3PL portals, or niche secondary market platforms with poor APIs. This component uses a combination of secure RPA (Robotic Process Automation) or browser automation agents to perform actions like extracting 3PL stock reports or uploading lot sheets to liquidation platforms. It acts as a middleware layer, translating orchestration logic into system-specific actions while handling authentication and error recovery.