The inventory landscape has become a strategic battleground. Companies that master adaptive inventory management don’t just survive market volatility —they thrive in it. Whether you’re managing automotive parts, consumer goods, or industrial supplies, there are proven methodologies that can fundamentally change how your organization thinks about inventory.
When the Optimal Inventory Strategy Is a Moving Target, Adaptability Is Essential
Inventory strategies have shifted repeatedly over the past few years: from just-in-time before COVID, to just-in-case during the pandemic, to a hybrid “right-sizing” approach, and now back toward just-in-case in response to rising tariffs.
That volatility isn’t going away. Companies are scrambling to get ahead of tariffs, manage supply chain disruptions, and make fast decisions that can be shared across the enterprise. The key takeaway? Organizations must analyze quickly and adjust frequently.
Teams need tools that support scenario planning, portfolio modeling, and cross-functional collaboration to help inventory decisions keep pace with shifting external pressures. Success depends on having analytics capabilities that can handle diverse datasets and evolving market dynamics while maintaining transparency and governance.
Portfolio Optimization Creates Measurable Impact
During a recent webinar, consulting firm West Monroe showcased a compelling case study involving an aftermarket automotive retailer using Alteryx to build a portfolio optimization model.
The model uses economic margin theory to balance the expected sales value of a SKU against its holding costs. This approach moves inventory planning from intuition-driven to data-backed decision making.
The results were striking:
- Cut dead inventory by 100,000 units
- Improved inventory turns by 60%
- Increased gross margin by 1–3% at the store level
- Achieved up to 15% improvement through market share capture
- Reduced total inventory by 25%
Use Data to Target Lost Sales, Not Just Efficiency
West Monroe’s approach extends beyond optimizing existing inventory. Their model identifies missed market opportunities, such as customers or vehicles in your service area that you aren’t reaching today, but could be.
Using third-party vehicle data from S&P Global, they calculate penetration gaps by ZIP code and vehicle type. This granular view helps clients pinpoint where they’re underperforming and where growth opportunities exist.
For example, they discovered a 5% delta between national and local penetration rates for a popular vehicle model. This gap revealed significant untapped demand in that specific market, providing a clear target for inventory expansion.
The dataset allows companies to see every single vehicle by model year, make, and engine configuration in each ZIP code across the United States. This level of detail transforms inventory planning from reactive to proactive.
Empowering Business Users with AI and Advanced Analytics
Analytics and AI are no longer exclusive to data scientists. Thanks to low-code tools and natural language interfaces, inventory analysts and planners can now:
- Ask questions like “Which SKUs are driving the most stockouts in Q2?”
- Model stocking strategies without writing code
- Embed inventory logic into dashboards and decision tools
- Deploy predictive models using accessible workflows
Even sophisticated portfolio optimization models can be built and maintained by business teams. This democratization of advanced analytics with solutions like Alteryx means organizations can implement AI-powered inventory management solutions without building large technical teams or waiting for IT resources.
Inventory Optimization Requires Cross-Functional Ownership
In today’s modern enterprise, inventory strategy is no longer just an operations issue. Success depends on aligning inventory strategy with marketing, finance, IT, and customer analytics teams.
Capturing missed market share requires more than just stocking the right SKUs. It demands understanding local customer demand, pricing competitiveness, and store experience, all of which come from beyond the supply chain team.
This collaborative approach ensures that inventory investments align with broader business objectives and customer acquisition strategies. With this context, having a platform that enables governed sharing of data and insights becomes essential.