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$3.4M excess inventory identified across 120 SKUs in 3 distribution centers. 18 items below safety stock threshold driving fill rate down to 91% against a 95% target. Rebalancing across locations frees $1.2M in working capital. Immediate action on top 20 SKUs closes 68% of the fill rate gap within 30 days.
eyko Ideas
Too much inventory traps cash. Too little loses sales. Inventory Optimization Playbooks analyze demand variability, lead time uncertainty, and service level targets across every SKU to find the balance that frees working capital without sacrificing fill rate.
The Challenge
Static safety stock formulas apply the same buffer logic to every SKU regardless of demand variability, lead time uncertainty, or service level requirements. The result is too much inventory on stable items and too little on volatile ones.
Excess inventory ties up working capital that could fund growth. Most companies carry 15-25% more inventory than they need, but the excess is invisible because it is spread across hundreds of SKUs in multiple locations.
Stockouts on critical items damage customer relationships and drive revenue to competitors. A 91% fill rate sounds acceptable until you calculate that the 9% gap represents thousands of lost orders and millions in missed revenue annually.
How eyko Solves It
An Inventory Optimization Playbook connects to your ERP, warehouse management system, and demand data. It analyzes every SKU by demand variability, lead time reliability, and service level target to calculate optimal stock levels, then identifies where to add inventory, where to reduce it, and how to rebalance across locations.
The Playbook identifies $3.4M in excess inventory spread across 120 SKUs in 3 distribution centers. Simultaneously, 18 items sit below their calculated safety stock threshold, contributing to a fill rate of 91% against a 95% target. Rebalancing frees $1.2M in working capital without reducing service levels.
| Metric | Current | Benchmark | Status |
|---|---|---|---|
| Primary indicator | Flagged | Target | Action needed |
| Secondary indicator | Monitoring | Within range | On track |
| Trend direction | Declining | Stable | Review required |
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FAQ
Everything you need to know about Inventory Health Assessment.
Inventory Optimization is an AI-powered analysis that calculates the right stock level for every SKU based on demand variability, lead time uncertainty, and service level targets. It moves beyond static safety stock formulas to dynamically adjust buffer levels as conditions change. The output is a set of specific rebalancing actions: where to add inventory, where to reduce it, and how to redistribute across locations to maximize fill rate while minimizing working capital.
The Inventory Optimization Playbook connects to your ERP system (SAP, Oracle, Microsoft Dynamics), warehouse management system, and demand planning data. It combines current stock positions by SKU and location, historical demand patterns, lead time records by supplier and lane, open purchase orders, service level targets by customer or channel, and cost data including carrying cost, stockout cost, and ordering cost.
Yes. The Playbook supports differentiated service level targets by SKU, category, customer, or channel. High-margin products or strategic accounts can be assigned a 99% fill rate target while lower-priority items operate at 90%. The optimization engine calculates the inventory investment required for each service level and shows the marginal cost of each percentage point, so you can make informed trade-offs.
eyko reads inventory, demand, and supply data from your ERP system and runs the optimization analysis on top of it. It does not replace your ERP inventory module. Instead, it identifies gaps that ERP static rules miss, such as SKUs where demand variability has changed or lead times have drifted. Recommended actions (purchase order adjustments, safety stock changes, rebalancing transfers) are exported in a format your planning team can execute directly in the ERP.
Join the enterprises replacing weeks of manual analysis with a single prompt. See what eyko Playbooks can do with your data.
