Inventory: a strategic asset that is poorly managed
For a midsize manufacturer or distributor, inventory often accounts for 20 to 40% of total assets. Yet inventory management remains a blind spot in many companies. The result: tied-up capital, recurring stockouts and soaring logistics costs.
Mistake #1: Managing inventory without linking it to forecasts
Many midsize companies manage their inventory levels reactively, based on fixed reorder points. This approach ignores seasonal variations, promotions and market trends. Effective management ties inventory policy directly to demand forecasts.
Mistake #2: Applying the same rule to every SKU
Not every SKU deserves the same level of attention. A cross ABC classification (value × variability) lets you differentiate inventory policies: just-in-time for A items, safety stock for C items, management by exception for B items.
Mistake #3: Ignoring the total cost of ownership
The cost of inventory is not limited to the purchase price. Warehousing, obsolescence, insurance, handling, cost of tied-up capital: the total cost of ownership (TCO) can amount to 15 to 30% of inventory value per year. Without this view, replenishment decisions are skewed.
Mistake #4: Not measuring service level
Service level, the ability to deliver to customers on the promised date, is the mirror KPI of inventory. Optimizing inventory without measuring service level is flying blind. The two must be tracked together to find the right balance between availability and cost.
Mistake #5: Managing replenishment manually
When replenishment suggestions are calculated by hand or with Excel macros, errors are inevitable. A dedicated tool automatically calculates order quantities, taking into account supplier lead times, logistics constraints (MOQ, pack sizes) and forecasts.
How Ganacos addresses these challenges
Ganacos integrates inventory management into an end-to-end view of the supply chain. Inventory levels are calculated dynamically based on demand forecasts, supplier lead times and service level targets. Replenishment suggestions are automated, and exceptions are flagged for human action. The result: less inventory, fewer stockouts, more visibility.
