Inventory Optimization Support | BaszGroup

Inventory Optimization Support

Inventory optimization programs don't fail because the math is wrong. They fail because service level targets are unclear, demand variability is underestimated, execution discipline is weak, and organizations chase turns without understanding the cost.

Inventory optimization balances service, cost, and working capital across a multi-echelon network. It's not just about safety stock formulas. It requires demand segmentation, differentiated service targets, network positioning strategy, and relentless execution discipline. When programs break, it's usually a combination of generic one-size-fits-all policies, unrealistic service expectations, poor demand data, and operations teams that bypass the rules when pressure hits.

BaszGroup supports organizations through inventory optimization design, policy tuning, segmentation strategy, and recovery when programs deliver neither the service nor the inventory reduction promised.

How Inventory Optimization Is Used Across Industries

Inventory strategy varies by product life cycles, demand patterns, and network structure. The approach has to match your business reality.

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Consumer Packaged Goods (CPG)

Multi-echelon networks, high SKU proliferation, promotional volatility, and retailer service pressure. Inventory optimization must balance DC inventory with retailer service requirements.

Learn more about CPG programs →
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Grocery & Food

Perishable products, expiration management, freshness targets, and waste minimization. Inventory optimization must prevent stockouts while aggressively managing shelf life.

Learn more about Grocery programs →
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Industrial & Manufacturing

Raw materials, components, finished goods, and service parts. Inventory optimization must coordinate across the supply chain from suppliers to customers.

Learn more about Industrial programs →
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Medical & Regulated Products

Lot control, expiration tracking, regulatory buffers, and critical service requirements. Inventory optimization must maintain compliance while managing obsolescence risk.

Learn more about Regulated programs →
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3PL & Logistics Providers

Client-specific inventory targets, shared space constraints, and diverse service level agreements. Inventory optimization must balance competing client priorities.

Learn more about 3PL programs →
Common Challenges

Where Inventory Optimization Programs Break

Challenge 1

Service level targets are generic and don't reflect reality

  • One-size-fits-all service targets applied across all products
  • Customer or channel-specific requirements aren't differentiated
  • A-items, B-items, and C-items get the same treatment
  • Service level definitions are vague (order fill rate vs. line fill rate vs. on-time delivery)
  • No clear trade-off framework when service and cost conflict
Symptom
"We're trying to achieve 98% on everything and can't afford it."
Challenge 2

Demand variability and forecast error aren't understood

  • Safety stock calculations use generic variability assumptions
  • Forecast error isn't measured by product or segment
  • Demand patterns (steady vs. lumpy vs. intermittent) aren't segmented
  • Promotional and new product demand treated the same as baseline
  • Lead time variability from suppliers isn't factored into buffers
Symptom
"Some SKUs are always out of stock, others have years of supply."
Challenge 3

Multi-echelon network positioning isn't optimized

  • Inventory targets are set location by location, not as a network
  • Upstream and downstream buffers aren't coordinated
  • Slow movers sit at every echelon instead of being centralized
  • Network changes (new DCs, closed facilities) don't trigger inventory rebalancing
  • Cross-fill and transshipment capabilities aren't factored into positioning
Symptom
"Total inventory is high, but we still can't fill orders on time."
Challenge 4

Optimization logic doesn't account for real-world constraints

  • MOQs, pack sizes, and container economics aren't reflected in targets
  • Storage capacity constraints aren't factored into inventory recommendations
  • Shelf life and expiration limits aren't built into optimization models
  • Seasonal build requirements conflict with turn targets
  • Working capital limits aren't enforced as a portfolio constraint
Symptom
"The model says one thing, but we can't execute it."
Challenge 5

Inventory policies aren't maintained as conditions change

  • Safety stock targets set at launch never get revisited
  • Product lifecycle changes (growth to maturity to decline) aren't reflected
  • Supplier performance degrades but buffers don't adjust
  • Demand patterns shift but segmentation doesn't get updated
  • Policy exceptions become permanent without review
Symptom
"Inventory policies worked at first, but now they're all wrong."
Challenge 6

Execution discipline breaks under pressure

  • Operations teams override policies to avoid short-term stockouts
  • Expedite orders and emergency shipments bypass the rules
  • Sales pressure forces safety stock inflation without analysis
  • Planners don't trust the optimization recommendations and work around them
  • No governance process to review and approve policy changes
Symptom
"We have an inventory optimization system, but nobody follows it."

Struggling with Inventory Optimization?

If your inventory optimization program isn't delivering service improvements or inventory reduction, we've helped organizations fix these exact issues.

Post Go-Live Utilization Issues

Why Inventory Optimization Programs Degrade

Utilization Issue 1

Segmentation and differentiation disappear over time

  • ABC classifications become outdated as demand patterns shift
  • Service level differentiation collapses back to one-size-fits-all
  • Product lifecycle transitions aren't reflected in policies
  • New products default to generic rules instead of tailored treatment
Symptom
"We're back to treating everything the same."
Utilization Issue 2

Exception management overwhelms the process

  • Exception alerts are too noisy, so real issues are buried
  • Policy overrides become routine instead of rare
  • Root cause analysis doesn't happen, so problems repeat
  • No escalation path for systemic issues that need cross-functional resolution
Symptom
"We're constantly firefighting and never improving."
Utilization Issue 3

Performance tracking and continuous improvement stop

  • Inventory vs. service trade-offs aren't measured systematically
  • Turns, days of supply, and fill rates are reported but not analyzed
  • Working capital impact isn't visible to leadership
  • No formal process to tune policies based on performance
Symptom
"We don't know if optimization is working."
Data Conversion and Migration

Where Data Migration Breaks

Data Pitfall 1

Historical demand and service data aren't migrated cleanly

  • Insufficient history for statistical modeling and variability analysis
  • Stockouts and lost sales aren't flagged, biasing demand patterns
  • Service level performance baselines are lost
  • Seasonal patterns require multi-year history that's missing
Symptom
"Safety stock calculations are wrong because we lost the history."
Data Pitfall 2

Product and network attributes are incomplete

  • ABC classifications, product hierarchies, and segmentation rules are lost
  • Lead times, MOQs, and pack sizes aren't migrated correctly
  • Network relationships (which DC supplies which customer) aren't preserved
  • Shelf life, expiration rules, and lot control requirements are missing
Symptom
"The new system doesn't know how to optimize our network."
Data Pitfall 3

Current inventory positions and in-transit visibility are lost

  • On-hand inventory counts at cutover are inaccurate or incomplete
  • In-transit and on-order inventory aren't tracked during transition
  • Reserved and allocated inventory distinctions are lost
  • Multi-location visibility breaks, creating optimization gaps
Symptom
"Optimization recommendations are wrong because inventory data is wrong."

Need Help with Inventory Optimization Data Migration?

Demand history, segmentation rules, and network configurations are complex to migrate. We help organizations transition without losing optimization capability.

Legacy System Sunset and Replacement

The Challenge of Replacing an Existing Inventory Optimization System

Replacing an inventory optimization system is operationally risky because policies can't just stop. The legacy system holds tuned parameters, segmentation logic, and service level frameworks that planners depend on. Transition timing is critical because even a few weeks of poor inventory decisions create months of recovery.

The transition requires careful parameter translation, parallel planning windows, and cross-functional alignment to maintain inventory control during the switch.

Replacement Challenge 1

Optimization logic and parameters don't translate cleanly

  • Legacy algorithms and safety stock methods don't map to new platform
  • Years of tuning and adjustment are lost in translation
  • Segmentation rules and service level frameworks need to be rebuilt
  • Custom policies and exceptions require manual recreation
Replacement Challenge 2

Parallel optimization creates conflicting recommendations

  • Some planners use legacy, some use new system, with different targets
  • Purchase orders and replenishment decisions conflict across systems
  • No single source of truth for inventory targets
  • Working capital tracking becomes impossible during parallel operations
Replacement Challenge 3

Legacy decommissioning loses institutional knowledge

  • Historical optimization decisions and rationale aren't documented
  • Performance trend data and tuning history are lost
  • Policy exception justifications and approvals aren't preserved
  • Audit trail for inventory decisions becomes incomplete
What Good Looks Like

Measurable Success in Inventory Optimization Programs

  • Inventory turns increase by 15 to 30% without service degradation
  • Service levels stabilize or improve across prioritized segments
  • Working capital reduction is sustained over time
  • Stockout frequency declines for critical A-items
  • Excess and obsolete inventory is identified and reduced systematically
  • Slow movers are centralized, improving network efficiency
  • Policy exception rates decrease as optimization matures
  • Planners trust and follow optimization recommendations
  • Expedite freight and emergency orders decline significantly
  • Legacy system is decommissioned with full policy history preserved
  • Continuous tuning process is established for policy refinement
  • Cross-functional alignment on service vs. inventory trade-offs strengthens
How BaszGroup Supports Inventory Optimization Programs

Where We Engage

We support inventory optimization programs from strategy design through policy tuning and recovery. Our focus is segmentation strategy, service level differentiation, network positioning, and execution discipline. We help organizations move from reactive inventory management to proactive, data-driven optimization.

Pre Go-Live Advisory

Segmentation strategy, service level framework, safety stock methodology, network positioning design, policy governance, testing strategy, and risk control.

Go-Live Command Center + Stabilization

Hands-on support during the critical transition window. Triage, daily cadence, parameter tuning, exception resolution, and performance tracking.

Program Recovery and Remediation

For inventory optimization programs that are underperforming or stuck. Root-cause assessment, segmentation redesign, policy retuning, execution discipline restoration, and sustained improvement.

Legacy Replacement and System Sunset

Controlled migration from legacy optimization system to new platform. Policy translation, parallel planning governance, parameter tuning, and clean decommissioning with history preservation.

Learn More About Our Inventory Optimization Services

Ready to Talk About Your Inventory Optimization Program?

Let's Balance Service and Inventory

Whether you're designing a new optimization strategy, tuning existing policies, or recovering from a program that isn't delivering, we can help.