Editorial note: This article is a fictional reconstruction of situations businesses may face. Its purpose is to inform and raise awareness about possible risks and responses. People, events, data and outcomes should not be interpreted as actual cases, verified facts or results achieved by LC. Each organization needs its own assessment.
Laura worries that the warehouse is full. Yet two key products frequently run out. Inventory is more than counting everything equally: it means knowing what exists, how it moves, how long replenishment takes and what waiting or overbuying costs. Laura starts with products that most affect the customer promise.
The system count needs checking
The team compares recorded stock with a physical sample. They find unrecorded returns and packages reserved for future orders. Before calculating purchases, they fix how arrivals, departures and reservations are recorded. A formula on inaccurate data creates false confidence.
Separate products by impact
Laura looks at demand, margin, variability and lead time. The two critical products get frequent reviews and an explicit reorder point. Slow movers need a different decision: promotion, smaller buys or even leaving the catalog. There is no universal safety quantity for every item.
Review the delivery promise
For several weeks they compare stockouts, cash tied up in inventory and deliveries fulfilled. If a supplier changes lead time, they adjust the rule before making new promises. Inventory management is not about filling shelves; it connects purchasing, operations and sales around a promise the business can meet.
Prioritize products that most affect customers and validate data before setting buying rules.
BRING IT TO YOUR BUSINESS
Three questions to get started.
- Which product runs out and which does not move?
- How long does replenishment actually take?
- Does the record match physical stock?
Does this sound like a challenge in your business? We can start with a conversation.
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