Obsolete Inventory: Ageing, Evidence and Disposition
Review ageing stock with last demand, commitments, supersession, recoverability, disposition owner and approval instead of declaring items obsolete by age alone.
Obsolete inventory is stock that no longer has a realistic expected use or sale under the current evidence. Age is a warning signal, but the decision also needs demand, commitments, supersession, technical use and recoverability.
An item with no movement for twelve months may be obsolete, a strategic spare or stock for a slow customer order. The ageing report starts the review; it does not make the decision.
Use an evidence-based ageing review
| Item | On hand / committed | Last movement | Current evidence | Decision | Owner |
|---|---|---|---|---|---|
| Legacy label roll | 80 / 0 | 18 months | Artwork retired | Dispose after approval | Packaging |
| Gearbox spare | 1 / 0 | 30 months | Critical installed asset remains | Retain; review annually | Maintenance |
| Old housing rev B | 240 / 0 | 14 months | Rev C superseded B | Rework feasibility review | Engineering |
| Resin grade X | 600 kg / 400 kg | 10 months | Open confirmed order | Retain for order | Planner |
| Fixture plate | 2 / 0 | 22 months | Compatible with active route | Retain at lower minimum | Production |
Separate ageing from obsolescence
Start with quantity, location, last receipt, last issue, open demand and open commitments. Then add replacement status, compatible products, approved substitutes and recovery options. The responsible owner decides whether to retain, transfer, rework, return, sell, downgrade or dispose.
IAS 2 Inventories gives the accounting context for inventory measurement and net realisable value. Apply accounting and tax treatment with the responsible finance adviser.
Run the review in Optiwise
Optiwise brings stock balances, movement history, purchase receipts, production demand and sales commitments into the review. Configurable records can keep the supersession reason, evidence date, proposed disposition, approver and final movement together.
Use the inventory workflow to establish the balance and the production record to confirm continuing demand.
Close the loop after approval
A disposition decision is not complete until the stock movement, value treatment and supporting document are recorded. Keep the approval distinct from the person who physically moves or destroys the item.
Questions from manufacturing teams
Is old inventory automatically obsolete?
No. Age triggers review. Current demand, commitments, asset support, substitutes and recoverability determine the decision.
Who should approve obsolete inventory disposal?
Use your defined financial and operational authority. The review normally needs inventory evidence plus the technical or commercial owner’s input.
Should obsolete stock remain in available inventory?
Once approved for disposition, separate it from usable stock so it cannot satisfy production or sales demand by mistake.
Related Posts
Will AI Replace My Procurement Job?
AI will change procurement work, but it is more likely to automate repetitive tasks than replace procurement professionals who build supplier judgment and strategy.
14 Jun 2026Read more →Cloud Procurement | Optiwise
Learn cloud procurement for SMEs and manufacturers, including purchase requests, approvals, supplier follow-up, inventory linkage, and how AICAN Optiwise improves control.
12 Jun 2026Read more →Benefits Of Inventory Management | Optiwise
Learn the benefits of inventory management for SME manufacturers, including stock accuracy, lower working capital blockage, fewer stockouts, better production planning, and dispatch control.
9 Jun 2026Read more →Automated Inventory Management System | Optiwise
Learn how automated inventory management systems help manufacturers improve stock accuracy, low-stock alerts, warehouse control, material planning, and reporting.
7 Jun 2026Read more →