Inventory: Not Just A Feeling - Waypost Advisors Case Study

Inventory Management Case Study: How much inventory should I have? 

“I feel like we have too much inventory.”  

Maybe we’ve uttered these words while scratching our heads.

Did you know there’s a way to objectively tell if you have the right inventory and what it should be costing you?

Consider this real-world inventory management case study.

A PE-backed, $175 million consumer goods company was scaling-up its production and wanted to know what it could reliably commit to selling as capacity grew.

Deliveries to the customer needed to be at least 98% on-time and in-full and because the shelf-life of the product was limited.

With the help of Waypost Advisors, the company was able to:

• Understand their optimal stocking levels and production schedule
• Optimize their service level to the customer
• Mitigate inventory risks

Calculating How to Improve Inventory Management

From the gathered information, our advisors built a statistical inventory modeling that helped the consumer goods company make crucial decisions, including:

• The quantity of product they could commit to selling and meet the 98% product availability target
• A minimum and maximum level of inventory they needed to keep on-hand, per SKU
• What/when to produce in order to meet their desired service level
• The optimal production quantity (batch size) and schedule
• The most valuable ways to invest their capital, for example:
  • Improving production yield
  • Extending shelf-life
  • Increasing batch size

They did not need to implement expensive systems to accomplish this work, nor did they need years of data to get insightful information. Our inventory management advisor was able to help them fit best practices to their company and use common tools such as Microsoft Excel.

Their Inventory Management Results

Through our partnership, the company could clearly see the financial impacts of their inventory management.

• They reduced stock-outages by 50% in the first year
• They knew what actions to take if their inventories became too high, such as changing production or leveraging marketing strategies
• They reduced expired inventories by 25% in the first six months simply by better monitoring their consumption and aging inventory trends

The company no longer wondered ‘how much inventory should I have.’

They now knew what their minimum inventory levels could be and how to drive decisions when levels were too low or too high.

How to Improve YOUR Inventory Management

This is the experience our advisors can bring you! Together, we can:

• Understand your inventory needs
• Improve your inventory management
• Use data to make crucial decisions

Want to learn more about how you can drive impressive business performance at your company?

Send us a message or schedule a free, 30-minute call to talk about your inventory questions.