Reducing inventory was always a goal of logistics. The problem is that, for decades, it could only be achieved by taking more risks: stock breaks and lost sales. But some companies are managing to operate with less product in the warehouse without losing service capacity. Not because they foresee the future better, but because they react earlier when something changes.

Inditex is a good example of this change. Its logistics model is not based on accumulating stock “in case”, but on shortening as much as possible the time between what happens in store and the operational decision. It produces in short series, collects sales data in the stores continuously, and adjusts manufacturing and distribution in very short cycles.

When a piece is successful, it rests quickly. When not, it ceases to occur. The lower level of inventory does not increase the risk: it reduces it, because the company can rectify it earlier.

Decathlon addresses the same problem from another angle. Not so much by reducing production cycles, but by increasing operational visibility along the entire chain. Its commitment has been to replace the accumulation of inventory with reliable information in real time.

The company has deployed RFID – labels that allow it to identify and locate each product automatically and in real time – massively in production, warehouses, transport and stores. Each product is identified and followed throughout the process. The logic of stock is evolving you no longer need to have a lot of products to protect yourself from uncertainty, because uncertainty is lower.

Thanks to this visibility, Decathlon knows what there is, where it is and what rhythm of departure each reference has. The inventory ceases to be an estimate and becomes a data. In this way, it rests precisely, deviations are detected before they become problems and it reacts without resorting to excessive mattresses.

The benefit is obvious: less fixed inventory and less operational risk at the same time.

For years, reducing inventory meant accepting more stock breaks and more tension in the logistics area. Today, some companies are achieving the exact opposite: to serve their market well with less stock.

When the company cannot react in time

• High inventory as a safety net
• Spaced decisions, based on forecasts
• Late corrections, when the problem is already palpable
• Stock to cover the lack of coordination

When the company can react in time

• Lowest inventory as a result, not as a starting point
• Frequent decisions based on real data
• Early fixes, when there is still margin
• Information and coordination replace stock accumulation