--- title: The Hidden Cost of Poor Inventory Planning description: Discover how leading manufacturers are transforming inventory planning—and unlocking bigger value—by connecting demand, production, and supply chain data. image: https://www.profitand.com/hubfs/Hidden%20Cost%20of%20Poor%20Inventory%20Planning.jpg --- Hit enter to search or ESC to close * ** * * ** * #### Contact us **Email:** [ info@profitand.com](mailto:info@profitand.com) Profit& Ltd** **100 Bishopsgate London EC2N 4AG United Kingdom **Telephone:** +44 208 1382241 Profit& Srl Via Savoia 78 00198 Rome Italy **Telephone:** +39 0685237413 Profit& Sp.zo.o Ul. Złota 59 Skylight p. 14 00-120 Warsaw Poland **Telephone:** +48 782 579 777 - [**](https://twitter.com/Profitand1) - [**](https://www.linkedin.com/company/profit%26-ltd/) [Supply Chain Management](https://www.profitand.com/blog/tag/supply-chain-management), [Inventory Management](https://www.profitand.com/blog/tag/inventory-management), [Manufacturing](https://www.profitand.com/blog/tag/manufacturing) # The Hidden Cost of Poor Inventory Planning By [Pawel Kowalski](https://www.profitand.com/blog/author/pawel-kowalski) June 18, 2025 [ No Comment](https://www.profitand.com/blog/the-hidden-cost-of-poor-inventory-planning#comments-listing) Most manufacturing leaders are well aware of their inventory issues. Stock piles up. Shortages appear out of nowhere. Firefighting becomes the norm. But what’s less obvious—and far more damaging—are the costs these issues quietly generate every day. Behind every missed projection or last-minute order lies a deeper, hidden cost: trapped working capital, inflated logistics spend, reactive decision-making, and a supply chain that can’t flex to meet change. And at the root of it all? Poor inventory planning. # What's Really Causing Inventory Pain?  In many organisations, inventory, demand, and production planning live in disconnected silos—each using different tools, different assumptions, and often, outdated data. This fragmentation creates delays, inefficiencies, and blind spots. To compensate, planners rely on complex spreadsheets. They spend days collecting and reconciling data just to answer simple questions: - What’s in stock? - What’s on order? - What do we need—and when? And even with all that effort, confidence in the answers is low. That uncertainty shows up as: - *Excess and obsolete inventory*, silently draining capital. - *Urgent orders*, driving up procurement and transport costs. - *Manual errors*, increasing audit risk and eroding trust. - *Slow reporting*, which delays decisions and hampers agility. - *Overstretched planners*, stuck wrangling data instead of planning strategically. These are the hidden costs of poor inventory planning. And they’re not on your P&L—but they are hurting your business. --- # Why Inventory Is the Best Place to Start  Inventory is where these challenges often surface first. It’s measurable, it’s visible—and improving it can deliver quick wins. That’s why it’s often the starting point for digital supply chain transformation.  Take [Aptiv](https://www.profitand.com/case-studies/automotive-supply-chain), a global leader in automotive technology, that we worked with recently.   Like many they were grappling with: - Inventory processes managed through siloed spreadsheets. - Limited visibility across regions and systems.  - High levels of excess and obsolete stock eroding margin. - Slow, manual reporting processes. We helped Aptiv implement an Anaplan-based solution focused specifically on **Inventory Planning** and **Excess Inventory Management**—without yet digitising demand or production planning. --- # What Changed: From Hidden Costs to Visible Impact #### INVENTORY PLANNING Planners now benefit from a centralised, connected view of inventory across the entire supply chain. They can track stock levels against policy across time, with visibility into where stock sits—whether in production, in transit, or in warehouses. A dynamic dashboard flags when action is needed, enabling proactive decisions that prevent overstocking or shortages before they happen. #### EXCESS AND OBSOLETE By aligning real-time inventory with current demand signals, planners can spot surplus stock risks early. Instead of reacting too late, they can now reallocate or dispose of stock before it becomes a liability—freeing up capital and space. #### SCENARIO PLANNING With simulation capabilities, the team can test different inventory strategies and policies, compare outcomes, and refine assumptions. That’s led to better decisions and more resilient inventory positions. --- # Results: A Strong Foundation with Immediate Impact  Replacing spreadsheets with Anaplan didn’t just improve visibility—it eliminated much of the hidden cost and manual effort. - Inventory and requirements downloads from SAP were cut from 2 days to just 1. - Monthly and quarterly stock reserve projections now take 5 days instead of 1.5 weeks. - Plant-level data reviews and audits were reduced from 1 week to just 2 days. - Management reporting now takes only half a day, down from a full week. - Tracking inventory optimisation initiatives, once manual and error-prone, is now automated and reliable. All these results were achieved before Aptiv integrated upstream demand or production planning. Imagine the impact of connecting planning across the entire supply chain.  With every additional function brought into the fold—demand forecasting, production scheduling, supply planning, S&OP—moves closer to truly synchronised operations. One connected plan. One version of the truth. Endless opportunities to optimise. When planning is aligned end to end, the hidden costs don’t just shrink—they disappear. And what emerges is a supply chain that’s not only efficient, but resilient, agile, and a true driver of competitive advantage. --- # Hidden Costs Today. Strategic Advantage Tomorrow What makes poor inventory planning so dangerous is how quietly it accumulates cost. The inefficiencies don’t scream—they seep. But when addressed, they create a domino effect of improvement: - Inventory turns improve. - Working capital is released. - Warehousing and logistics become more efficient. - Teams spend less time wrangling spreadsheets and more time planning strategically. - Decisions become faster and better informed. Inventory may be the first step, but the future lies in connecting demand, supply, and production planning into a single, integrated model. That’s where Anaplan excels—helping manufacturers move from fragmented, reactive operations to a state of continuous, connected planning. --- # What’s Your Experience? Are You Still Absorbing Cost? If your team is still spending days consolidating data or reacting to inventory issues at the last minute, chances are you’re already paying the hidden cost. The good news? It’s avoidable—and fixable. We’d love to hear your perspective. Are these issues familiar in your business? What hidden costs have you uncovered? Share your thoughts in the comments, or get in touch to explore how connected planning could transform your supply chain—starting with inventory.   **[![Contact Us](https://no-cache.hubspot.com/cta/default/5385453/b644583c-1375-49c0-a7f9-5420bfaec8de.png)](https://cta-redirect.hubspot.com/cta/redirect/5385453/b644583c-1375-49c0-a7f9-5420bfaec8de)**   #### SHARE THIS - ** - ** - ** [Supply Chain Management](https://www.profitand.com/blog/tag/supply-chain-management) [Inventory Management](https://www.profitand.com/blog/tag/inventory-management) [Manufacturing](https://www.profitand.com/blog/tag/manufacturing) ![Pawel Kowalski](https://www.profitand.com/hubfs/Pawel-Kowalski.jpg) #### [Pawel Kowalski](https://www.profitand.com/blog/author/pawel-kowalski) Pawel is an experienced Anaplan Partner, passionate about helping finance professionals leverage new technology. He enables them to move beyond traditional number-crunching and take on a more strategic advisory role. A qualified accountant with the ACCA, Pawel spent six years in the industry before forging a career in Enterprise Performance Management (EPM) consulting. He has led large-scale EPM projects and developed deep expertise in planning, budgeting, forecasting, transfer pricing, and cost management. His extensive experience includes leading EPM technologies from Anaplan, Oracle, and SAP. Before establishing Profit& in 2016, Pawel held consulting roles at PwC Finance Consulting and Vantage Performance Solutions. [**](https://www.profitand.com/blog/the-hidden-cost-of-poor-inventory-planning#) ** ** ** ### Recent Posts [ ## Manufacturing Planning Is Connected. 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