Holding excess inventory can hold many pros and cons when attempting to understand what type of distribution strategy you seek to have.
By far one of the most important aspects pertaining to manufacturing facilities and warehouses across the globe include managing inventory. Depending on what your organization holds or produces, you need to ask yourself some questions. What is my demand? How frequently does it fluctuate? How cost-effective would holding excess inventory be? Would warehousing product increase my revenue in the long-term? These questions are all prevalent and important when deciding on whether or not to hold excess inventory – and ultimately how much you should store and choose to reorder at a given time.
Holding excess inventory is both advantageous and detrimental to an operation, but the options can be weighed when considering what type of products you are warehousing. Within this blog, we are going to discuss the pros and cons associated with holding excess inventory and how it pertains to your operation.
The pros and cons of holding excess inventory include the following:
The cons of holding excess inventory include the following:
Understanding the advantages and disadvantages pertaining to holding excess inventory can greatly enhance the decision making process through allowing you to decide whether it is an option for you or not. A software that can aid with adequate inventory management is PlanetTogether’s Advanced Planning and Scheduling (APS) Software. Advanced Planning and Scheduling (APS) Software is a must for manufacturing operations that are seeking to enhance operational efficiency and cut costs within their operation as well.
Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.
Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.
Excess inventory often hides deeper planning issues: unreliable schedules, poor visibility into capacity, and weak alignment between demand and supply. At the same time, cutting inventory too aggressively can lead to shortages and missed deliveries. PlanetTogether APS connects capacity planning, production scheduling, and inventory strategies so you can find the right balance for your products and customers.
In this video, you’ll learn how PlanetTogether APS helps you:
– Visualize resource capacity and workload across plants, lines, and work centers
– Align production plans with forecasted and actual demand to avoid overproducing
– Run what-if scenarios to compare the impact of different inventory and capacity strategies
– Reduce overtime, expediting, and “just-in-case” inventory by planning around real constraints
– Use existing ERP/MRP data to create a single, realistic plan that supports both service level and inventory targets
This video is ideal for operations leaders, inventory managers, and production planners who want to move beyond rule-of-thumb stock levels and use APS to systematically balance capacity, inventory, and customer service.
Holding extra stock helps you respond faster and avoid shortages—but it also ties up cash, increases storage costs, and raises the risk of obsolescence. The real challenge isn’t just deciding whether to hold excess inventory, but where the tipping point is for your products, customers, and network. That’s a planning problem, not just a warehouse problem.
Download our one-page “The Money Is in the Planning” infographic to see how planning and scheduling choices quietly turn into:
Use it as a quick checklist with your team to identify where Advanced Planning & Scheduling (APS), working alongside your ERP/MRP, can help you cut excess inventory while still protecting response time and customer service.
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