Reasons for keeping inventory

What availability issues keep you awake at night? | 5 signs that you need more stock!

One of the main reasons for keeping inventory is to provide customers with the best possible level of service. However, many business leaders still spend sleepless nights worrying about finding the balance between product availability and supply chain cost.

What are the main reasons for keeping inventory?

Inventory is required to satisfy customer demand. However, the actual level of inventory required is influenced by a number of factors:

• Volatility in supply
• Supplier constraints such as minimum order quantity
• The stocking strategy in place
• contractual service level agreements with customers
• Purchasing economies of scale & cost optimisation
• Minimisation of delivery costs
• Level of service expected by the customer

Are you holding enough inventory?

While too much stock can kill margins, too little can be equally as destructive to service levels. After all, how can a business compete if it is not able to fulfil demand in a timely manner?

Based on our experience of working with over 950 organisations across the world, we have outlined the most common signs that a business has availability issues: