Your business may be carrying more stock than it needs, even when your staff are making perfectly sensible inventory decisions.
The catch? Those decisions can only be as good as the picture they have in front of them.
Your stock figure tells you how much capital is sitting in stock. What it doesn't tell you is why it's there.
And when uncertainty is repeated across products, locations and hundreds of everyday decisions, it can quietly shape the stock position of the whole business.
So, perhaps the executive question isn't just: "How much stock are we carrying?"
It's worth asking: "How much are we carrying because of what we can't confidently see?"
Stock value. Stock turns. Write-offs. Warehouse capacity.
All useful measures. But they tell you how your stock is performing, not the full story of how it got there.
The same goes for the stock figure itself. As John Hill, Principal Consultant and Centre of Excellence Lead at GenetiQ, demonstrates, stock can move between locations while the overall stock level remains unchanged. There's often a lot going on underneath that number.
Behind it are thousands of everyday decisions: what to buy, how much to buy, where to hold it, whether to transfer it and when to replenish.
And those decisions may make perfect sense based on what your staff can see.
A buyer orders more to protect availability. A branch holds extra because supply is uncertain. Another location replenishes without knowing that the same stock is already sitting elsewhere.
Sensible decisions. Potentially expensive outcome.
Then there’s another complication. The stock you have isn't necessarily the stock you can act on.
Some may already be allocated to customers. Some may be in quarantine and unavailable for sale. More may be on its way from suppliers. And stock sitting elsewhere in the business could remove the need to buy more altogether.
So, an stock figure can be completely accurate and still not give your staff enough context to make the right decision.
Look at each decision individually and it may make perfect sense. Zoom out, and the business may be carrying more stock than it needs.
Understanding stock performance means looking underneath the number and asking what your staff could confidently see when those decisions were made.
Here’s the thing: your business can have the stock, the data and staff making perfectly sensible decisions, and still be carrying more stock than it needs.
The problem can sit in the gap between what your business has and what your staff can confidently see, trust and act on.
At GenetiQ, we call that 'The Visibility Gap'.
The bigger that gap gets, the more your business may be paying for what your staff can’t see.
Can your staff see what's physically available, what's already been promised to customers and what's coming in? Can they see whether another location already has the stock they sneed? And when stock moves, does the rest of the business see the consequences quickly enough to act?
Then there's accuracy. Because visibility isn't much help if your staff don't trust what they're seeing.
One way businesses can maintain that accuracy is through cycle counting. John Hill, Principal Consultant and Centre of Excellence Lead, describes the principle as counting “a little bit each working day”, so that products are checked throughout the year.
That can make stock accuracy part of the everyday operation, rather than something that gets a sudden burst of attention once or twice a year.
Greater accuracy gives staff more confidence in the information they're using to make decisions.
When that confidence is missing, your staff must fill in the gaps themselves. They might check stock manually, hold additional stock or make decisions based only on what they can see locally.
Again, perfectly understandable.
But multiply those decisions across hundreds of products and locations and the cost of uncertainty starts to add up.
The Visibility Gap can influence how much stock the business carries, where working capital is deployed and how much time your staff spend checking rather than acting.
Suddenly, stock visibility isn't just a stockroom issue. It has implications for working capital, operational control and your ability to scale confidently.
Growth has a habit of making things more complicated. More products. More locations. More warehouses. More sales channels. More suppliers. More staff making decisions. More stock moving between them.
And more places for the Visibility Gap to open.
At a smaller scale, your staff can often fill in the blanks. The warehouse manager knows where something is. Someone knows that delivery arrived this morning, even if the information hasn't caught up yet.
Useful? Absolutely! Scalable? Not really.
The person who once knew where everything was can't provide that knowledge across multiple warehouses. A branch manager can't know what every other location is holding. And leadership certainly can't investigate every stock movement or replenishment decision.
As the operation becomes more distributed, your business becomes increasingly dependent on a shared, reliable view of stock.
Without that shared view, growth can demand more working capital, more warehouse space and more management attention simply to compensate for the uncertainty that comes with greater complexity.
In other words, stock can start scaling with uncertainty as well as demand.
Which gives you another useful question to ask as the business grows:
"Is our stock increasing because the business needs it, or because greater complexity is making it harder for our staff to see what we already have?"
If your business is holding additional stock because your staff don't trust the stock picture, simply telling them to carry less isn't going to make that uncertainty disappear.
A better question is:
"What would our staff need to see, know and trust to make the same decisions with less stock?"
Some stock will always be necessary to protect availability and support growth. But some may be there because your staff don't have a clear view of the wider stock position.
And that's worth knowing.
Because if uncertainty is influencing how much stock you carry, your stock problem may also be a visibility problem.
Close the Visibility Gap and your staff have a clearer picture to make decisions from. You have a better basis for deciding how much stock the business really needs.
And potentially a lot less capital sitting on a shelf, just in case.