Right-Sized Inventory: Stop Chasing the Lowest Number
There's a metric that gets chased in every DC I've ever worked in: inventory reduction. Leadership wants it down, finance wants it down, and whoever hits the lowest number gets the slide in the QBR. I get it. Carrying costs are real. But I've watched operations cut so deep they were air-freighting product at 9x the cost because a single supplier had a two-week delay. The savings evaporated fast.
The goal isn't lowest. It's right. Right for your lead times, right for your demand variability, right for the physical reality of how your warehouse actually receives and moves product. A site running 48-hour replenishment cycles from a regional DC needs a completely different buffer than one that's ocean-freight dependent with 60-day lead times. Same SKU, different answer.
What makes this hard is that 'right-sized' doesn't produce a trophy. It produces a stable operation that doesn't make the news. No one buys you lunch for avoiding a stockout in aisle 7. But talk to the ops team six months after an overcorrection — after the emergency buys, the customer credits, the overtime to receive a panic shipment on a Friday dock — and they'll tell you exactly what the real cost looked like. Usually down to the dollar.
Getting there takes honest counting, not just financial inventory but accurate, location-level cycle counts that reflect what's actually on hand versus what the system thinks is there. Phantom inventory is the quiet killer. If your count data is dirty, your position decisions are built on nothing.
Yuneva built CountIt for exactly this problem — accurate data, fast, without a team of people and a clipboard. Worth a look at www.yuneva.com and www.count-inventory.com if this is the kind of thing keeping you up.
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