Your Growing Inventory May Not Be a Supply Chain Problem

Your inventory problem may not be a supply chain problem

Recently, I worked with a manufacturer that was experiencing rapidly growing inventory levels across raw materials, WIP, and finished goods.

Leadership initially believed the supply chain organization had lost control.

After a rapid assessment, we found something very different.

The supply chain team was performing exactly as designed. The real drivers of inventory growth were decisions being made elsewhere in the business:

• Product portfolio expansion without full visibility into working capital impact
• Optimistic new product forecasts that became inventory commitments
• Service level expectations that required additional inventory coverage

The lesson was simple: inventory is often a symptom. The root cause is frequently found in product strategy, forecasting discipline, and cross-functional decision-making.

Before asking what your supply chain team is doing wrong, ask a different question:

What operating conditions have we created that make this outcome predictable?