Quantify coverage
Measure how long current and inbound inventory can satisfy expected demand.
GUIDE
How to reduce excess inventory without creating new stockouts.
Excess inventory should be identified relative to expected demand, target coverage and replenishment conditions—not from a single blanket threshold.
Segment by importance
ABC or business-value segmentation prevents low-impact stock from receiving the same treatment as critical items.
Measure cash exposure
Translate excess units into working capital so teams can prioritize meaningful opportunities.
Change future orders
Reducing excess requires correcting replenishment decisions, not only discounting existing stock.
Balance cash and availability
The goal is not minimum inventory. It is enough inventory to protect the intended service level without holding stock that has little operational value.