WarehouseOps editorial · Updated 20 September 2026
Start with the decision
Agree whether the review should reduce shortages, release cash or manage supplier risk. These aims may conflict. Freeze the reporting date, exclude consignment stock consistently and reconcile inventory value to the same costing basis used for consumption.
Worked example
A site has ₹30 lakh average stock and ₹10 lakh monthly COGS. Period turns are 10 ÷ 30 = 0.333. With 30 days in the period, days on hand are 30 ÷ 10 × 30 = 90. This is not 0.333 annual turns; annualization needs a representative period and explicit assumptions.
Review the exceptions
Export ABC–XYZ classes, then add criticality, expiry risk, supplier lead time and open orders. A cheap critical spare can deserve more protection than a high-value optional item. Assign each exception an owner, action, due date and evidence needed to close it.
Use the result
For shortages, investigate unavailable versus inaccurate stock before increasing buffers. For excess, check committed demand and cancellation rights before cutting orders. Compare the next review with the same definitions.