TechGear Electronics: 34% Inventory Cost Reduction
How a consumer electronics distributor eliminated $220K in annual obsolescence losses using AI demand forecasting and dynamic reorder logic.
Company Background
TechGear Electronics distributes consumer electronics and accessories to 1,200+ retail and e-commerce accounts across North America. With $28M in annual revenue and 4,800 active SKUs — many with 90-day product life cycles — inventory management is the central operational challenge. Holding the wrong stock at end of product life drives disproportionate losses.
The Challenge
Consumer electronics demand is notoriously volatile — driven by product launches, review cycles, and social media. TechGear's planning team used an ERP with a 90-day rolling average forecast, completely blind to the velocity signals that actually drive short-cycle demand.
The result: $220K in annual write-downs on discontinued SKUs, combined with frequent stockouts on high-velocity new releases that generated rush-order premiums of up to 40% above standard cost.
The Solution
Velocity-Based Demand Sensing
ML model incorporating POS sell-through data, Amazon rank signals, and review velocity to detect demand shifts 3-4 weeks before they appear in traditional sales data.
End-of-Life Liquidation Engine
Automated flagging of SKUs with declining velocity against product lifecycle curves. Proactive markdown scheduling reduced average write-down value per SKU by 61%.
Dynamic Safety Stock
Safety stock calculations updated weekly by SKU. High-velocity, high-uncertainty SKUs carry more buffer; stable products carry less. Total inventory fell 18%.
Launch Ramp Templates
Pre-built demand ramp templates for product launch categories, calibrated on historical launches. Rush-order premiums eliminated in the first quarter as launch stocks were right-sized from day one.
The Outcome
Inventory holding costs fell 34% within two quarters. Obsolescence write-downs dropped from $220K to under $40K annually. Forecast error improved from 31% to 12% MAPE — a level the planning team had not believed achievable in this category.
Time spent on inventory management per planner dropped from 35 hours to 9 hours per week, freeing the team to focus on strategic supplier relationships.
"We went from $220K in annual write-downs to under $40K. The AI spots demand shifts weeks before our team would. For consumer electronics, that timing difference is everything."
VP Supply Chain
TechGear Electronics
Carrying too much of the wrong stock?
A Supply Chain Audit identifies your top inventory optimisation opportunities in one week — with an ROI model showing your specific savings potential.
Book the Audit →