Inventory Analyst

2 min read

An Inventory Analyst helps decide how much stock the business should hold, where it should sit, and which items need action.

The role balances service against working capital, storage, variability and obsolescence.

Role scope

Typical work includes:

  • inventory reporting;
  • segmentation;
  • stockout/excess analysis;
  • safety-stock review;
  • reorder logic;
  • slow-moving/obsolete stock;
  • cycle-count accuracy;
  • root-cause analysis.

Inventory metrics

Useful measures include:

  • inventory value;
  • turns;
  • days of supply;
  • fill rate;
  • stockout rate;
  • excess/obsolete value;
  • inventory accuracy;
  • backorders.

Do not optimize turns alone. Extremely lean inventory can damage service.

ABC segmentation

ABC analysis groups items by importance, often using value or usage.

But one dimension may be insufficient.

You may also segment by:

  • demand variability;
  • lead time;
  • criticality;
  • margin;
  • service target.

Segmentation should change policy.

Safety stock

Safety stock protects against uncertainty.

Key drivers include:

  • demand variability;
  • lead-time variability;
  • service target;
  • replenishment frequency.

More uncertainty usually requires more protection unless the process itself is improved.

Reorder points

A simple reorder point combines expected demand during lead time with safety stock.

The formula is less important than the inputs.

Bad lead times or demand data produce bad settings.

Excess and obsolete inventory

Investigate why stock became excess:

  • forecast bias;
  • MOQ;
  • buying decision;
  • product discontinuation;
  • slow demand;
  • duplicated materials;
  • poor master data.

The goal is prevention, not just disposal.

Cycle counting

Cycle counting supports inventory accuracy.

Analyze discrepancies by:

  • location;
  • item;
  • transaction type;
  • shift/process;
  • frequency.

Repeated adjustments without root-cause work do not improve the system.

Tools

Useful tools include:

  • ERP;
  • Excel;
  • SQL;
  • BI;
  • planning systems.

Portfolio evidence

Build an inventory project with:

  • SKU history;
  • demand;
  • lead time;
  • stock;
  • service target;
  • ABC segmentation;
  • reorder/safety-stock logic;
  • excess/stockout exceptions.

Then recommend policy by segment.

A strong inventory analyst explains why stock exists and which parameter or process should change.

Related content

Sources