Inventory Optimization
Less working capital, better service, on purpose.
- Typical duration
- 6 to 10 weeks
- Deliverables
- 5 core artifacts
Overview
Most inventory imbalance is not a volume problem, it is a placement and policy problem. The same total dollars, positioned differently and governed by parameters that reflect real lead time and demand variability, routinely deliver higher service.
We set multi-echelon safety stock, segment items by demand pattern and margin, and set reorder policy per segment rather than per instinct. Then we build the governance that keeps the parameters current after we leave, which is where most inventory programs quietly unwind.
What you get out of it
- Working capital released without a service level concession
- Safety stock positioned by echelon rather than duplicated at every node
- Policy parameters tied to measured variability and refreshed on a schedule
- Clear excess and obsolescence exposure with a disposition plan
Capabilities
What the work actually involves.
Multi-echelon inventory optimization
Guaranteed service and stochastic service models that decide where in the network to hold buffer, instead of holding a full buffer at every level.
Segmentation and policy design
Items grouped by volume, variability, margin, and criticality, with a distinct replenishment policy and review cadence per segment.
Lead time variability analysis
Actual received lead times mined from purchase order history, because quoted supplier lead times understate variability almost everywhere we look.
Service level economics
Target service levels set from the cost of a stockout against the cost of holding, per segment, rather than one company wide number applied uniformly.
Excess and obsolescence
Forward looking exposure by item with recommended markdown, redeployment, or write off actions and a projected cash impact.
Questions
Things people ask first.
- How is this different from what our ERP already does?
- Most ERP safety stock logic is single echelon and assumes a normal demand distribution with a fixed lead time. Real networks violate all three assumptions, and the gap tends to show up as simultaneous overstock and stockout in the same catalog.
- How long do the savings hold?
- Only as long as the parameters stay current. We build the refresh cadence into the handover for exactly this reason, and we would rather deliver a smaller number that persists than a larger one that unwinds in three quarters.
Next step
Have a inventory question?
Send the decision you are facing. A first conversation is a working session, and it usually clarifies scope more than a proposal would.