Where is inventory tying up unnecessary cash – and why?
Which inventory positions tie up unnecessary capital, what causes them, and which decisions on portfolio, replenishment, service levels, procurement or ERP parameters can release working capital without putting service at risk?
Inventory is not a goal in itself. What matters is its economic purpose.
The Health Check connects inventory with service, portfolio economics, planning quality and ERP control parameters. It shows whether capital is being used deliberately or simply tied up.
Seven dimensions – from targets to sustainable control.
The diagnostic connects forecasting, segmentation, inventory parameters, service levels, portfolio economics, procurement and governance into one working-capital view.
From item portfolio to working-capital impact.
The key lever is differentiated control: high-value low-turnover items require different rules from fast-moving standard items. Portfolio, service levels and ERP parameters therefore need to be managed together.
See how 36 answers are translated into cash and management levers.
The fictitious sample uses the same report generator as the personal Executive Management Report: context, seven deep dives, measurement and financial validation, a 30/60/90-day plan, a 12-month roadmap and all 36 answers. Cash effects require verified operating data.
Open full sample reportFictitious answers · Industrial Manufacturing
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Inventory & Working Capital Health Check
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Managing inventory economically: EOQ, MOQ and working capital
Excess inventory often results from purchasing quantities that no longer reflect demand. Economic order quantity (EOQ) balances ordering and inventory holding costs. Supplier minimum order quantities (MOQ), actual order batches, lead times and supply risks constrain how the calculation can be applied in practice.
A defensible target stock level combines expected demand, safety stock and appropriate lot sizes. Quantities above that level require a review of usability, outstanding purchase orders and realistic inventory reduction timelines.
Keep financial effects separate: Working capital released is the inventory value that can actually be reduced. Additional recurring costs may arise from storage and capital tied up in stock; they are not a second working-capital release. An inventory write-down does not, by itself, generate cash.
Address the dominant cause – or move directly into implementation
Select the diagnostic or management support that best matches the dominant driver behind the inventory exposure.
Planning & decisions
If forecast quality, supply variability or missing management trade-offs are the main drivers of inventory.
S&OP / IBP Health Check →End-to-end supply chain
If inventory exposure is linked to supplier risk, operations, logistics, data or governance across several functions.
SCM Maturity Check →Production flow & WIP
If high WIP, bottlenecks, low throughput or delivery delays are the main operational drivers.
Production & Operations Health Check →Management review & implementation
If management wants to validate the findings, sharpen the mandate or translate priorities into an implementation plan.
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