High inventory and constant shortages are not opposites. They are the normal result of planning without accurate data or deliberate order policy.
Accuracy first
No inventory strategy survives inaccurate records. Before optimizing anything, establish transaction discipline at receiving, issue, completion and scrap, then use cycle counting to hold the line.
Target record accuracy by part class rather than trying to fix everything at once. The parts that cause shortages are usually a small subset.
Order policy is a decision, not a default
- Lot-for-lot for expensive, low-volume or engineered items.
- Fixed order quantity where setup or supplier minimums dominate.
- Min/max or reorder point for low-value, high-usage consumables.
- Safety stock sized from demand and supply variability, not from a flat percentage.
Reducing excess without creating shortages
Segment inventory by usage and value, identify what has not moved, and separate genuinely dead stock from slow-moving service parts. Then correct the policy that created the excess — otherwise it grows straight back.