DS Supply Chain Blog

Five Things You Can Do This Week to Reduce Inventory: Part I

Want to reduce your inventory? Well, you’ve got customer service levels to think about first. And the best inventory reductions are done in a targeted, highly strategic fashion—not blindly and across-the-board.5 Things You Can Do to Reduce Inventory

But all things being equal, your answer to my question is surely “yes.” In fact, practically any supply chain professional—not to mention, CFO—would jump at the chance to reduce their inventory.

So, why aren’t more companies actually doing it? There are several possible reasons.

For one thing, some company cultures are so geared towards customer service that any effort to reduce inventory will be seen as a threat to filling customer orders. Nobody wants to get left with an empty shelf when a key customer calls.

Then there are the companies in which sales reps rule the roost. When they say “My customer says they will buy our products if we put them in stock,” no one challenges them on how likely that sales are really going to happen.

And finally, there’s a fair amount of “passing the buck” that typically occurs when the subject of inventory reduction comes up. Everybody blames a bad sales forecast for the excess inventory. I’ve always thought that blaming the sales forecast was a bit of a cop-out. The real issue to me is whether there is a company culture that promotes process improvement rather than placing blame.

Don’t Make Excuses. Take Steps Now to Reduce Inventory.


As you can see, there are always many seemingly good reasons not to tackle inventory reduction. But I don’t have to explain to you the benefits of reducing your stock. And I can assure you it’s possible to do so without experiencing stockouts and losing customers.

The best way to get started is to get started. Seriously. Take a small step today, or by the end of this week, to reduce your inventory. You’ll be surprised at how quickly your efforts pick up momentum and start generating results.

I have even better news for you: your first step towards inventory reduction will be a surprisingly simple one.

You Won’t Get Anywhere Without a Goal


Launch your inventory reduction initiative by setting a goal.

Set a goal and get to work. You’ll probably be surprised to see how putting a number in front of everyone helps them to focus on what needs to be done, and to start taking concrete steps to do it.

Saying “Let’s reduce stock this year” gives everyone too much wiggle room. On the other hand, saying “Our goal is to reduce inventory by 10% by year-end” holds their feet to the fire.

In my next few blog posts, I’ll be sharing four more steps you can take to start reducing your inventory as soon as this week. Can’t wait to read more? Download our free white paper, “Five Things You Can Do This Week to Reduce Inventory.”

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