Having excess inventory is harmful to a company because it ties up valuable financial resources that could be better utilized elsewhere. This idle stock becomes a liability, as it not only requires storage space but also incurs additional costs such as insurance, security, and maintenance. Moreover, excess inventory increases the risk of obsolescence, where products may become outdated or spoiled, leading to further financial losses. For this reason, it is fundamental to monitor stock levels and ensure they are appropriately dimensioned for actual demand.

On-Hand Distribution Report

This report is a valuable tool to assess how well stock levels are maintained, and whether the on-hand inventory stays within the target range. It monitors the on-hand quantity of each item on a daily basis by comparing it to the optimal inventory levels. The report presents this data as a percentage of the ideal inventory threshold, providing a comprehensive overview of stock amounts across all items and historical dates.

In the image below you can see the report results for a company. Along the horizontal axis, each point represents a specific percentage of the optimal inventory threshold. Meanwhile, the vertical axis indicates the cumulative number of past dates where the inventory level was in that position, aggregated across all stocked components.

Ideally, the graph should form a bell-shaped curve centered around a percentage lower than 100%. That would indicate that all parts are similarly stocked in relation to their respective optimal inventory thresholds, and that stock levels are within the optimal range. On the contrary, a percentage greater than 100% indicates that the parts are overstocked.

Watch the report in action