case study: inventory optimization
$12.7M in capital released, 59% less excess stock, 98% customer fill rate.
Turning slow-moving stock into usable cash
An industrial distribution business was adding approximately $100 million in revenue and targeting $1 billion in annual revenue within a year. That growth placed greater demands on purchasing, inventory and the people responsible for keeping products available.
The business needed stock to support its customers. It also needed cash to fund its next stage of growth. Deciding what to buy, how much to hold and when to replenish had become increasingly consequential.
The opportunity was to understand where inventory was supporting sales—and where it was holding money the business could put to better use.
The challenge: Sales were growing, but cash was sitting on shelves
Sales wanted dependable availability. Finance wanted less cash tied up in inventory. The planning team had to translate both priorities into daily purchasing decisions.
Some stocking decisions reflected needs that had changed. Products carried for historical reasons did not necessarily warrant the same investment today. Without revisiting those assumptions, the business risked continuing to buy inventory that moved slowly while missing opportunities to strengthen availability where it mattered most.
Supporting the next stage of growth required better planning, clearer accountability and a shared understanding of what customers actually needed.
The Approach
The approach: Look beyond the inventory report
The work began by bringing Sales, Finance and Operations into the same conversation. Listening to customers and the sales team helped reveal why certain products were stocked and whether those reasons still held. Revisiting the underlying customer need exposed opportunities that inventory reports alone would not explain. Those conversations helped the team distinguish between stock that protected customer service and stock that was unnecessarily consuming cash.
Build planning into everyday work
A demand and supply planning function was established within an 11-person Procurement and Planning team. Responsibilities were clarified, planning routines introduced and inventory decisions connected to customer demand, supplier lead times and financial priorities. The team received hands-on coaching to challenge assumptions, review recommendations and focus attention on the exceptions with the greatest business impact. Regular reviews gave Sales, Finance and Operations a way to resolve competing priorities and make purchasing decisions together.
Put technology to practical use
Planning software, business-system improvements and AI-supported analysis were connected to the team’s daily responsibilities. These tools supported information review, scenario analysis and exception prioritization. Planners remained responsible for checking recommendations and applying their knowledge of customers, products and suppliers. The emphasis was on helping people make better decisions and making improved planning practices repeatable as the business grew.
The outcome: More cash available, with customer service protected
The broader inventory and planning improvement effort delivered significant financial and operational results, establishing a sustainable framework for future growth and departmental collaboration.
$12.7M
Working capital released
59%
Reduction in excess inventory
98%
Customer fill rate maintained
2.7
Inventory turns improved