You may already be trying to reduce inventory. But before you push buyers to carry less, it’s worth asking why they feel they need the stock in the first place.
In LBM, there are plenty of good reasons to hold inventory. Buyers need to protect availability, support local demand, cover supplier lead times and make sure customers aren’t left waiting for material they need to keep a job moving. But not every buffer exists because demand genuinely requires it. Sometimes, extra stock is there because the buyer doesn’t have a clear enough view of what the business already owns.
From your buyer’s point of view, carrying a little more can feel entirely sensible. If you’re not confident that the stock figure in front of you reflects what’s really available, or you’re not sure what another branch is holding, what’s already committed to customers or what’s due in from suppliers, buying more can feel like the safer decision.
You can often see that uncertainty in the workarounds buyers create for themselves. They check a spreadsheet before trusting the ERP system, call another branch to ask whether stock is genuinely free to move, look through open orders to see what’s already been spoken for, or override a recommendation because the number doesn’t quite feel right. Sometimes they simply add a few extra units because they’d rather explain surplus stock later than explain why a contractor is waiting on material today.
None of those decisions are especially dramatic on their own. But across hundreds or thousands of SKUs, branches and purchasing decisions, they can start to turn uncertainty into inventory.
LBM businesses carry significant inventory, so even a small amount of unnecessary buffer stock can represent substantial working capital. Census data put the sector’s inventory-to-sales ratio at 2.13 in June 2026. Meanwhile, in their 2025 dealer sentiment research, Principia, found that the proportion of lumberyard respondents agreeing that inventory turns were decreasing remained in the mid-30% range from Q1 to Q3.
Those figures don’t tell us why inventory is being held. Inventory turns can fall for all sorts of reasons. What they do show is why it’s worth understanding whether some of the stock sitting in yards and warehouses is there because buyers don’t feel confident enough to carry less.
Take for example, one branch is projected to run short of a fast-moving product before the next supplier delivery. On the face of it, the obvious response is to buy more.
Now imagine Branch A needs 20 units, while Branch B has 35 sitting above its normal requirement. From Branch A’s point of view, there’s a shortage. Across the wider business, there may already be enough stock to solve it.
The branch still needs replenishment, but another supplier order may not be necessary.
That sounds simple enough, but the decision becomes much harder when the buyer can’t see the whole stock position clearly enough to trust it. If they have to call Branch B to find out whether the stock is really there, whether it’s already committed, whether it can be transferred and whether the figure in the system is current, the purchase order can quickly start to feel like the cleaner option.
That’s how a decision that makes complete sense at branch level can still add unnecessary inventory across the business.
We call this the Purchasing Visibility Gap: the gap between what the business owns and what the buyer can confidently see and act on when deciding whether to buy more.
As that gap widens, carrying additional stock can start to feel like the safest way to protect availability and keep customers supplied. That response is understandable because being short can have an immediate consequence. A customer can’t collect what they need, a delivery has to be changed, a job gets held up or the sale goes somewhere else.
If the information buyers are working with hasn’t changed, the risk they’re trying to manage hasn’t changed either. That’s why simply asking them to carry less can miss the point.
The buffer often builds gradually. A little extra because a transfer might not arrive in time. A few more units because demand has been unpredictable. Another supplier order because nobody is quite sure whether the stock showing in the system is genuinely available.
Repeated often enough, those decisions can tie up meaningful working capital.
That’s why some safety stock may really be confidence stock: inventory carried because the Purchasing Visibility Gap is too wide for buyers to feel comfortable holding less.
Your inventory value or turns can tell you how much stock you’re carrying. They can’t tell you how much of that stock exists because buyers are compensating for uncertainty.
This is where stock accuracy and purchasing visibility start to separate.
A stock figure can be technically correct and still be insufficient for a purchasing decision. You may have 40 units on hand, but 25 are already committed to customer orders. Another 10 may be sitting in quarantine or somewhere else in the branch network. More may be inbound, but not soon enough to cover the demand in front of you.
So, the buyer needs more than an answer to the question, “How much stock do we have?” They also need to know how much of that stock is available for the decision they’re making.
Stock accuracy tells you whether a number is right. Purchasing visibility tells you whether the buyer has enough information around that number to decide whether more stock is needed.
The same principle applies to replenishment recommendations. If the system suggests buying 30 units, the buyer should be able to understand what’s driving that recommendation. Demand history, existing stock, customer commitments, inbound supply and target stock levels can all affect the answer, as can stock sitting elsewhere in the branch network.
A recommendation becomes more useful when the buyer can see enough context to understand and challenge it. If it simply gives them another number they don’t fully trust, the visibility problem remains.
One of the easiest ways to find the Purchasing Visibility Gap is to look at the extra work buyers do before they feel comfortable spending money.
That might be the spreadsheet they keep alongside the ERP, the phone call to another branch, the habitual override or the extra few units added to a purchase order. It might even be the feeling that the system says there’s enough stock, but experience says it would be safer to order anyway.
Those behaviours matter because they show you where confidence is missing.
This is where a visibility issue starts to become a working-capital issue. Overstock ties up cash, takes up yard and warehouse space and increases the risk of stock becoming slow-moving or obsolete. Reducing that inventory without addressing the reason it was created leaves the underlying uncertainty in place.
That gets closer to the real issue. The goal is to give buyers enough confidence in what they can see across branches, commitments, inbound supply and replenishment logic that holding less no longer feels like the risky choice.
Before you cut inventory, close the Purchasing Visibility Gap.