Inventory ties up cash, affects delivery speed, and shapes the customer experience. Mastering a few fundamentals can dramatically improve both service levels and profitability.

Reorder Points (ROP)
The reorder point tells you when to buy. A simple formula: ROP = (Average Daily Demand × Lead Time in Days) + Safety Stock. Review ROPs when lead times, demand, or service targets change.

Safety Stock
Safety stock protects against variability. Start with a pragmatic buffer for high‑velocity SKUs and review monthly. Track stockout frequency and adjust—too many stockouts means add buffer; aging stock means reduce.

Cycle Counting
Instead of one stressful annual count, cycle counting checks small subsets weekly. Prioritize A items for higher frequency. You’ll find discrepancies earlier and keep records clean for purchasing and accounting.

Practical Tips
• Standardize SKU naming and barcoding.
• Bundle slow movers with bestsellers to increase turns.
• Use minimum order quantities (MOQs) wisely—don’t overbuy to chase unit costs.

The goal isn’t zero inventory; it’s the right inventory in the right place at the right time.