Short, practical notes on excess inventory and working capital: how it builds, why it stays hidden, and how the right level of stock is set from your own demand.
Days of cover divides today's stock by last quarter's demand to answer a question about next quarter. When demand is moving, the same stock gives two different answers, and the gap is where the ordering decision goes wrong.
Read →Fill rate is almost always counted raw, so every SKU gets one vote. Weight it by sales and the number often changes, because a miss on your best seller and a miss on your slowest are not the same event.
Read →Every number that ties up capital gets checked by someone outside it. Days of stock is the exception, because the two functions closest to it both benefit from it staying high.
Read →A buffer set once during an uncertain patch, then never lowered, quietly ties up cash across every SKU. The cost of a one-time setting nobody comes back to.
Read →Two companies can sit on exactly the same industry average and be in opposite positions. The right stock level comes from your own business, not an average of others.
Read →Why excess drifts back after every clean-out, and the three ordinary planning mechanisms that keep refilling the shelf.
Read →The extra days are not dead stock. They are a few days of cover spread thin across the range, quietly tying up cash.
Read →Most of what sits on the shelf is cycle stock, set by how often you order, not how long delivery takes.
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