How much (inventory) is too much?

How much inventory should you carry? 8 weeks feels ‘safe’, right? Maybe 10?

I did not come into demand/supply planning with formal training in supply chain formulas - I was a political science major in college. Most demand and supply planners who I’ve met are the same.

So when making decisions like how much inventory to carry, most planners use common sense and rules of thumb from past experiences.

Even if you set up advanced supply chain logic, the challenge of maintaining it in spreadsheets is daunting.

That’s where our clients at Atomic have gotten really excited - they've always known the opportunities to unlock growth and savings in their inventory - they just didn’t have the tools to unlock them. Once they do, they are just so satisfied to finally master the inventory beast.

Oh, and the 'right' amount of inventory? It's a formula based on lead times, demand variability, and your risk tolerance/desired client service level. Which ideally is calculated by SKU/channel and varies with seasonality. Getting it right could be worth a lot in stock rate and shedding excess inventory. It's actually not complicated, but it's almost impossible to implement and maintain in spreadsheets.