Right Sized Inventory
Schedule Assessment
RSI FAQ · Question 03

How can companies reduce inventory without hurting service levels?

RSI FAQ Question 03
03
Short answer

Reduce inventory by targeting variability: segment SKUs, simulate service levels, fix lead-time noise, trim slow movers, and rebalance across locations.

You reduce inventory safely by balancing inventory across items and locations. Cutting “just in case” stock indiscriminately backfires; the smarter play is to align inventory with actual demand risk for each item/location combination.

Five practical levers
  1. Segment products by demand profile → Treat stable SKUs differently from erratic ones.
  2. Simulate service-level trade-offs → Use simulation models to test the impact of lower safety stock before acting.
  3. Address upstream variability → Shorten supplier lead times or improve production reliability.
  4. Rationalize slow movers → Pare down SKUs that add complexity without customer value.
  5. Rebalance across items and locations → Excess in for one item or one DC often masks shortages for other items and locations.
Example

One RSI client reduced overall inventory 18% while raising service levels from 92% to 96%, by cutting waste where it didn’t impact customers.

Key takeaway

Inventory cuts should come from precision, not blunt force. Done right, you serve customers better with less.

Related Network Balancing Services Assess, then operationalize

Have a question that isn’t answered here?

Set up a call with one of our team and we’ll walk you through a demo, identify trouble spots in your business, and see how implementing RSI can transform your business through data-driven inventory optimization.

Schedule a Call