Inventory Optimisation: Release 15-25% of Working Capital

Expert Inventory Optimisation Powered by Advanced Analytics

We analyse your entire inventory to identify exactly where capital is trapped, which items risk stock-out, and which should be liquidated. You receive a comprehensive strategic report with prioritised actions—no guesswork, just data-driven recommendations ready to implement.

This Is Professional Consultancy, Not Software

One-time expert analysis delivered in 4 weeks
No subscription fees or ongoing costs
No software to learn—results delivered as Excel + PDF
Upload directly to your ERP or use for manual decisions

Who This Is For:

UK businesses with £500K+ inventory value who want to release trapped capital without risking stock-outs. Ideal for distributors, manufacturers, and retailers managing 200+ SKUs.

See How Much Capital You Could Release

The Inventory Problem

UK businesses typically have:

15-25% of inventory value tied up in slow-moving or obsolete stock
Stock-outs on 10-15% of key items
Annual carrying costs of 20-25% on excess inventory

Example: A business with £2M in inventory could have £400K trapped in overstock costing £80K per year in storage, insurance, and obsolescence.

The Cost of Poor Inventory Management

Most UK businesses manage inventory using spreadsheets or basic ERP tools that apply the same rules to every product. This creates two expensive problems simultaneously:

1. Money Trapped in Overstock

Low-value, slow-moving items sit in your warehouse for months or years. You're paying for storage, insurance, handling, and obsolescence risk.

The cost: 20-25% of stock value per year in carrying costs.

Example: £100K of excess stock costs you £20-25K annually just to hold it.

2. Stock-Outs on Best-Sellers

High-value, fast-moving items run out because safety stock levels are set too low or based on outdated assumptions.

The cost: Lost sales, expedited shipping, customer dissatisfaction, and admin time scrambling to fix the problem.

3. One-Size-Fits-All Doesn't Work

Using the same safety stock percentage or reorder rules for all products treats a £5 low-value item the same as a £500 high-value item.

The result: Your most important products are under-protected while your least important products are over-stocked.

4. Forecasting Limitations

Most systems use simple averages or moving averages. But what works for stable products doesn't work for seasonal products or trending products.

The result: Inaccurate forecasts lead to ordering too much or too little.

Calculate Your Cost of Inaction:

Current Inventory Value (£):

Annual Carrying Cost (%):

Our Approach: Inventory Optimisation Per SKU

Instead of treating all products the same, we analyse each item individually using advanced statistical models to determine its optimal stock levels.

Tailored Forecasting

Each SKU is tested with multiple forecasting methods to find the most accurate approach:

Seasonal products get seasonal models
Trending products get trend analysis
Stable products get historical averages
Variable products get dampening algorithms

Every item gets the right forecasting method for its unique demand pattern.

Differentiated Service Levels

We classify your products by value and variability, then apply appropriate service levels:

High-value stable items: Tight control, high service levels
High-value variable items: Extra safety buffer
Low-value items: Minimal buffer, lean stock

This means you protect what matters while reducing waste on what doesn't.

Optimal Parameters Calculated

We calculate precise inventory optimisation parameters including:

Safety Stock: How much buffer you need
Reorder Point: When to trigger a new order
Order Quantity: How much to order
Maximum Stock Level: Your upper limit

These calculations account for both demand variability and supplier lead time reliability.

Clear Action Priorities

You receive prioritised lists:

Critical items: Order now to avoid stock-outs
Overstock items: Clear these to release capital
Obsolete items: Zero-demand products to liquidate
Healthy items: Products at optimal levels

How Our Analysis Works

Data Collection

Simple CSV Exports

You provide:

Inventory master file (current stock, costs, lead times)
Minimum 24 months of sales history (for forecasting accuracy)
Open purchase orders (optional)

Works with any system: SAP, Oracle, Sage, Excel - we just need CSV files.

Data Cleaning & Preparation

Quality Control

Remove duplicates and errors
Handle missing values
Clean outliers (promotional spikes, data errors)
Aggregate to monthly periods for analysis

This ensures your forecasts aren't corrupted by bad data.

Individual SKU Forecasting

6 Models Compete Per Item

For each product, we:

Run all 6 forecasting models
Test their accuracy using historical data
Select the model with lowest error
Generate 12-month forecast

Your seasonal products get seasonal models. Your stable products get trend models. Each item gets the right tool.

Optimisation & Classification

ABC/XYZ Segmentation

Classify by value (ABC analysis)
Classify by variability (XYZ analysis)
Calculate optimal safety stock for each segment
Determine reorder points and quantities

Report Generation

Professional Deliverable

Executive summary with key findings
Financial impact analysis
Priority action lists
Implementation guidance

Results Presentation

1-Hour Video Call

Walk through findings
Answer questions
Discuss implementation
Explain the Excel toolkit

Your Strategic Assets

1. The Strategic Transformation Blueprint

A comprehensive executive document (typically 40-50 pages) that identifies exactly where capital is trapped and provides a ranked action plan:

What's Inside:

The Waterfall Analysis: Visual breakdown showing precisely where your capital is locked up and the potential release value
Top 20 Liquidation Opportunities: Ranked by capital release value—clear priorities for immediate action
Top 20 Critical Stock-out Risks: Ranked by revenue exposure—protect what matters most
Model Competition Results: See which forecasting method won for each segment of your portfolio and why
ABC/XYZ Strategy Matrix: Your products classified and assigned differentiated service levels
90-Day Implementation Roadmap: Phase-by-phase plan with milestones and expected outcomes
Complete Mathematical Appendix: Every formula used (Safety Stock, ROP, EOQ) fully documented and transparent

This isn't a spreadsheet dump. It's a board-ready strategic document that justifies budget and demonstrates ROI.

2. The Execution Toolkit

Production-ready Excel workbook formatted for immediate implementation:

Included Tabs:

Executive Dashboard: Portfolio health at a glance
Priority Actions: Items requiring urgent attention sorted by impact
SKU Master Data: Complete optimised parameters for every single item
Implementation Guide: Step-by-step instructions for deployment

Optimised Parameters Per SKU:

Optimal Safety Stock (units)
Reorder Point (ROP)
Recommended Order Quantity (ROQ)
Target Maximum Stock Level
ABC Classification (Value Rank)
XYZ Classification (Variability)
Health Status & Forward Cover
Winning Forecasting Model

Formatted for direct implementation into SAP, Oracle, Sage, NetSuite, or any ERP system via CSV upload.

Why This Approach Works

Individual SKU Testing

Others: Apply one forecasting method to all products.

We: Test 6 models per SKU and select the winner. Your seasonal products get seasonal forecasting. Your stable products get trend analysis. Your erratic products get appropriate dampening.

Transparent Methodology

Others: Black box algorithms you can't verify.

We: Every formula is documented. You see exactly how safety stock was calculated. No secrets, no proprietary "magic".

No Software Subscription

Others: Monthly subscriptions and user training required.

We: One-time consultancy delivered as Excel and PDF reports. No software subscription needed. Upload results directly to your existing ERP or use for manual purchasing decisions.

Segmentation Strategy

Others: Same rules for every product.

We: Differentiated service levels based on value and demand patterns. High-value items get protection. Low-value items get lean management.

Common Questions

At minimum: (1) Inventory master file showing current stock, unit costs, and lead times. (2) Minimum 24 months of sales history for accurate forecasting. Optional but helpful: Purchase orders, supplier delivery performance data. We work with CSV exports from any system.

Up to 4 weeks from when we receive your data, depending on portfolio size and complexity.

We handle this routinely. Missing lead times get sensible defaults. Gaps in sales history are filled. Outliers are cleaned. You'll receive a data quality report showing what assumptions were made.

No. You get an Excel file with all the parameters. You can either upload this to your ERP system or use it as a reference guide for manual purchasing decisions. Works with any system or no system at all.

We recommend reviewing quarterly, especially if your business has significant seasonal patterns or growth. However, many clients implement our recommendations and run for 6-12 months before updating.

We sign NDAs before any data transfer. Your files are encrypted and stored securely. After delivery, your data is deleted from our systems (90-day retention for support purposes only). Fully GDPR compliant.

If we can't identify clear opportunities for improvement, we provide a full refund. This rarely happens, but we'd rather refund than deliver something you can't use.

Ready to Optimise Your Inventory?

Let's discuss your inventory challenges and see if our analysis is right for you.

Request a Quote

Tell us about your inventory (number of SKUs, industry, challenges) and we'll provide a detailed quote within 24 hours.

Get a Quote

See a Sample Report

Request a sample report excerpt to see the quality and depth of analysis you'll receive.

Download Sample

How It Works:

You send us your data → We analyse it → You get PDF + Excel with actionable recommendations
Simple, transparent, and effective.

Contact Us

Optimal Chain

Email: contact@optimalchain.co.uk