{"id":6667,"date":"2026-11-04T09:00:00","date_gmt":"2026-11-04T07:00:00","guid":{"rendered":"https:\/\/www.stockm.eu\/?p=6667"},"modified":"2026-11-04T11:24:54","modified_gmt":"2026-11-04T09:24:54","slug":"inventory-management-dynamic-buffers-release-cash","status":"publish","type":"post","link":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/","title":{"rendered":"How does managing inventory with dynamic buffers help release cash tied up in stock?"},"content":{"rendered":"\n<div class=\"wp-block-cover is-light has-text-color has-link-color editorskit-no-tablet editorskit-no-mobile wp-elements-1\" style=\"border-top-left-radius:20px;border-top-right-radius:20px;border-bottom-left-radius:20px;border-bottom-right-radius:20px;color:#000000;padding-top:40px;padding-right:40px;padding-bottom:80px;padding-left:40px\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-white-background-color has-background-dim-100 has-background-dim\"><\/span><div class=\"wp-block-cover__inner-container is-layout-constrained wp-container-core-cover-is-layout-9c76880f wp-block-cover-is-layout-constrained\">\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Managing inventory with dynamic buffers frees up cash in a fairly simple way: you order only what current demand calls for. So if you have too much of a product, even one that sells well, you order only enough to last until the next replenishment. Every product at every location gets a target stock level that covers actual sales until the next delivery arrives. Anything above that level is simply not reordered. That stock sells over the following weeks, and the cash comes back with it. Any money you didn&#8217;t spend on ordering surplus stock is available straight away to order other products or to put toward other business goals.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Dynamic Buffer Management (DBM) keeps those target levels realistic. If stock stays high for long enough, that&#8217;s a sign the buffer is too big, so it gets reduced. If a product keeps running short, its buffer goes up. Stock built up for a season or a promotion goes back to its normal level once the season or promotion is over.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">This article is part of our series:<\/p>\n\n\n\n<ul style=\"font-size:16px\" class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">Inventory and working capital: is inventory a company investment?<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-2\" style=\"font-size:24px;font-style:normal;font-weight:500\">Why does cash get tied up in inventory in the first place?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Most finance managers will know the symptoms. Cash is short, the warehouse is full, stock turns too slowly, and yet the products customers actually want are somehow the ones that are out of stock. What&#8217;s harder to see is how the company ended up there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">It&#8217;s rarely down to one big mistake. As we explained in our article on <a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">where working capital gets tied up in inventory<\/a>, the problem builds up from small decisions that made perfect sense at the time. A few typical examples: a supplier offered free delivery above a certain order value, so the order was made bigger. Stock was increased because a supplier was unreliable, but when the supplier&#8217;s reliability got back to where it had been, the stock was never brought back down. Christmas products gradually became part of the permanent range. Demand for a product group dropped, but the order size stayed the same.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">What these cases have in common is that the stock level stayed the same while everything around it changed. Min-max settings can be reviewed regularly, and some companies do that, especially with the help of AI. But where nobody touches them for months at a time, surplus and shortages tend to grow along with the inventory. We look at this in more detail in <a href=\"https:\/\/www.stockm.eu\/en\/why-min-max-doesnt-work\/\">Why min\u2013max usually doesn&#8217;t work<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-3\" style=\"font-size:20px;font-style:normal;font-weight:500\">How does a dynamic inventory buffer work?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">In <a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">TOC inventory management<\/a>, a buffer is the stock you deliberately keep of one product at one location so that it stays available until the next replenishment arrives. Its size depends on how much of that product actually sells or gets used there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The buffer has to cover the order cycle plus the lead time. In StockM&#8217;s <a href=\"https:\/\/www.stockm.eu\/en\/toc-buffer-zones\/\">buffer zones example<\/a>, a product is ordered every four weeks and arrives within a week, so the buffer needs to cover five weeks of consumption. Buffer size also depends on how much consumption varies and how important the product is.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The buffer is then split into green, yellow and red zones, each set as a share of the buffer. Green means there&#8217;s enough stock. Yellow means stock is going down the way it should. Red means the product is at risk of running out and someone needs to act today. Over time, the way stock moves between the zones also shows whether the buffer itself is still the right size.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">What matters most for cash is how orders are calculated. On every ordering day, you order the quantity that brings the product back up to its buffer level, counting stock on hand, stock already on order and stock in transit. After a few slower weeks, that order is small, and sometimes zero. A fixed, regular schedule decides when you order, and consumption decides how much. We explain this difference in more detail in <a href=\"https:\/\/www.stockm.eu\/en\/toc-inventory-management-vs-min-max\/\">What is TOC inventory management and how is it different from the classic min-max method?<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-4\" style=\"font-size:20px;font-style:normal;font-weight:500\">How can you actually release cash from inventory?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The stock sitting in your warehouse today is the result of the way you manage inventory now. If you want a different result, you have to do things differently from how you&#8217;ve done them so far. So changing how you manage inventory starts with changing how you think about it. Managing inventory with dynamic buffers fundamentally changes the logic that was, and still is, standard practice for many companies and inventory managers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Managing inventory and building orders around buffers first of all stops you from buying unnecessary stock again, while still protecting your most important products. In practice, the cash usually comes from five places:<\/p>\n\n\n\n<ol style=\"font-size:16px\" class=\"wp-block-list\">\n<li>Surplus that simply isn&#8217;t replenished. Say you have 900 units of a product and its buffer is 600. The next few orders will be small or zero until stock settles back at the buffer level. No write-offs and no special projects. The cash comes back gradually through normal sales.<\/li>\n\n\n\n<li>Buffers that are too big. A product that stays in the green zone month after month has a bigger buffer than it needs. StockM manages buffers dynamically, so it would suggest reducing it. If that doesn&#8217;t happen, the buffer size is being driven by something else, such as a large minimum order quantity for the product (usually set by the supplier).<\/li>\n\n\n\n<li>How often you order. Because the buffer covers the order cycle plus the lead time, moving from monthly orders to orders every two weeks shortens the period the buffer has to cover. But this comes at a price. More orders can mean higher ordering or transport costs, and suppliers&#8217; minimum order quantities don&#8217;t go away. It&#8217;s a commercial decision that purchasing and finance should make together.<\/li>\n\n\n\n<li>Temporary stock needs to end on time. Seasons and promotions need stock before the demand is there, and that&#8217;s where forecasts and commercial plans do their job, as we explain in <a href=\"https:\/\/www.stockm.eu\/en\/toc-dynamic-buffer-management-or-forecasting\/\">TOC or forecasting<\/a>. The cash problem usually comes later, when the raised level quietly stays put in the warehouse. If every temporary buffer change has an end date, most of that problem goes away.<\/li>\n\n\n\n<li>Slow-moving or obsolete products. Some stock won&#8217;t sell on its own, however long you wait. The sooner you spot it, the more options you still have to move it, reprice it, send it back to the supplier or stop selling it. We cover these options in the section <a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">When does inventory stop creating value?<\/a> of our main article.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">All of this works in the other direction too. Products that keep dropping into the red zone get bigger buffers, so some of the cash you free up can be reinvested where it will create real value. In our view, that&#8217;s usually the right call.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-5\" style=\"font-size:20px;font-style:normal;font-weight:500\">What does released cash mean in financial terms?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">When inventory goes down, the company gets back the cash that was tied up in stock. From a finance point of view, it&#8217;s important to keep three things apart: how much cash comes back, what the company saves each year, and what it means for profit.<\/p>\n\n\n\n<ol style=\"font-size:16px\" class=\"wp-block-list\">\n<li>Released cash comes back once. Say average inventory goes down by \u20ac400,000. The company gets that \u20ac400,000 back once and can use it for other things, but the same amount won&#8217;t simply appear again next month or next year.<\/li>\n\n\n\n<li>Releasing cash and reducing inventory brings one more benefit: smaller inventory costs less to hold. Storage, insurance and handling costs go down, and so does the risk of products becoming obsolete. How much you save depends on your company&#8217;s cost structure.<\/li>\n\n\n\n<li>Lower inventory doesn&#8217;t automatically mean higher profit. If surplus has to be sold off below cost, the cash comes back, but a loss may show up in the reports. That&#8217;s why spotting surplus or obsolete stock as early as possible helps keep those losses down. Even so, managing inventory according to real demand means you can use the cash you free up to fill gaps in stock. When you have what your customers need, you can grow your sales and their trust in you.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Tracking inventory turnover in days shows whether reducing inventory and changing the way you manage it is paying off. Inventory turnover in days is defined as the average number of days a company holds its inventory before selling it. Average inventory is the average of the inventory at the start and the end of the period:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px;font-style:italic;font-weight:300\">Inventory turnover in days = average inventory for the period \u00f7 cost of goods sold \u00d7 number of days in the period<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\"><strong>IMPORTANT!<\/strong> Always look at this figure together with the availability of your most important products, in other words, together with lost sales. If inventory days are going down while shortages are going up, you&#8217;re cutting inventory in the wrong places.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-6\" style=\"font-size:20px;font-style:normal;font-weight:500\">How does StockM use dynamic inventory buffers?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">StockM is an assortment and inventory management system built on TOC and DBM. Every product at every storage location gets a buffer that is continuously updated based on actual consumption (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a>&#8220;), and dynamic buffers adjust to sales flow and lead times (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/inventory-management-retail-perishable-goods\/\">Retail and Perishable Goods<\/a>&#8220;). On ordering day, StockM suggests the quantity needed to top up the buffer, and when demand is low, that quantity can be zero (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">Buffer-based inventory management in trading and manufacturing companies<\/a>&#8220;).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">StockM also flags products whose buffers are consistently too big or too small, so the inventory manager can review them and accept or reject the suggestion. In practice, though, retail companies most often have dynamic buffers adjusted automatically for every product. Promotions and seasons, meanwhile, are planned in advance in the promotions and seasons module and entered into StockM, which raises the buffers when the time comes and automatically sets them back to their previous level once it&#8217;s over. Every day, inventory managers see clear priorities in the system for which orders and stock situations to deal with first, so they can focus their attention and effort where it will make the biggest difference.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">In more than 15 years of working with trading and manufacturing companies, we&#8217;ve seen total inventory levels reduced by 15-30% within 12-24 months.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" style=\"font-size:20px\">Hypothetical example<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px;font-style:italic;font-weight:100\">The figures below are made up to illustrate the calculation. This is not a client case. We assume stable demand, a reliable supplier, and a buffer based on the highest weekly sales during the replenishment time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">A wholesale company sells a product that costs \u20ac20 per unit. It sells about 100 units a week, and up to 120 in a busier week. Orders go out every four weeks, and the goods arrive a week later. Out of habit, the team orders up to a maximum of 900 units.<\/p>\n\n\n\n<figure style=\"font-size:16px\" class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td><strong>Scenario<\/strong><\/td><td><strong>Weeks covered<\/strong><\/td><td><strong>Buffer (units)<\/strong><\/td><td><strong>Inventory value at cost<\/strong><\/td><\/tr><\/thead><tbody><tr><td>Current practice: ordering up to a maximum of 900 units<\/td><td>not linked to lead time or order frequency<\/td><td>900<\/td><td>\u20ac18,000<\/td><\/tr><tr><td>Dynamic buffer, ordering monthly<\/td><td>4 + 1 = 5<\/td><td>5 \u00d7 120 = 600<\/td><td>\u20ac12,000<\/td><\/tr><tr><td>Dynamic buffer, ordering every two weeks<\/td><td>2 + 1 = 3<\/td><td>3 \u00d7 120 = 360<\/td><td>\u20ac7,200<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Once the team switches to a 600-unit buffer, the 300 units above it are no longer reordered. At 100 units a week, they sell out in about three weeks and bring back around \u20ac6,000. If the supplier can deliver every two weeks at an acceptable price, the buffer could come down to 360 units, which would free up about \u20ac10,800 compared with the old maximum.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">Keep in mind that these are target levels, not average inventory. Keep an eye on the buffer status over the next few months. If the product starts running short regularly, the buffer is too small and needs to go back up.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" style=\"font-size:20px\">StockM client: household goods retailer<\/h4>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px;font-style:italic;font-weight:100\">This is an ongoing StockM project, and the client&#8217;s name isn&#8217;t disclosed. The implementation is still in progress, so what follows are the opportunities the project manager has seen so far, not measured results.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The client is a mid-sized retailer with eight stores selling long-life household goods. The main reason the company decided to bring in an inventory management system was a constant shortage of working capital combined with constant stockouts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The company&#8217;s usual practice was to keep large quantities of its best-selling products in the warehouse so that it would never lose a sale to a stockout. It looked like a sensible way to make sure the most important products were always available. But that decision tied up a large share of the company&#8217;s working capital.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The obvious place to look for cash seemed to be somewhere else: in slow-moving and non-moving stock. The company has both, and getting cash out of them would be ideal. The trouble is that nobody wants to buy those products. They&#8217;re hard to sell off, and the cash comes back slowly, if it comes back at all.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">That&#8217;s where the project manager sees a bigger opportunity to release tied-up cash faster. When every product is managed according to actual consumption and replenishment time, excess stock of good sellers can come down to a buffer that still keeps them available. Those products keep selling, so the surplus turns into cash through normal trading, and the company can invest that cash in its further growth. Work on slow-moving and non-moving stock still has to happen in parallel, but it no longer carries the job of generating all the cash on its own.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:18px\">The project was another reminder that implementing StockM is about more than installing software. The bigger change is in how the team manages inventory day to day, and it&#8217;s that change in approach that delivers results.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-theme-primary-color has-text-color has-link-color wp-elements-7\" style=\"font-size:20px;font-style:normal;font-weight:500\">Frequently asked questions<\/h3>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1793613652538\"><strong class=\"schema-faq-question\"><strong>How quickly do dynamic buffers help release cash?<\/strong><\/strong> <p class=\"schema-faq-answer\">It depends on how quickly the product sells. Surplus of a fast-moving product can be gone within a few order cycles. Slow movers take longer, and some surplus won&#8217;t sell off without someone actively deciding what to do with it. Expect the cash to come back over a few months, not overnight.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793613667364\"><strong class=\"schema-faq-question\"><strong>Don&#8217;t smaller buffers mean more stockouts?<\/strong><\/strong> <p class=\"schema-faq-answer\">Not if they&#8217;re calculated from real consumption and replenishment time and checked against buffer status. If a product keeps dropping into the red zone, its buffer is increased.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793613683442\"><strong class=\"schema-faq-question\"><strong>Do I need to change my ERP to implement StockM?<\/strong><\/strong> <p class=\"schema-faq-answer\">No. StockM runs as a separate system alongside your ERP and needs regularly updated data from your accounting system (stock balances, sales, replenishments, transfers). Inventory management and order building move over to StockM.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793613693303\"><strong class=\"schema-faq-question\"><strong>Does this work for manufacturers?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, when you manage stock of components and finished goods (read more in &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/inventory-management-manufacturing\/\">Manufacturing<\/a>&#8220;).<\/p> <\/div> <\/div>\n\n\n\n<h4 class=\"wp-block-heading\" style=\"font-size:18px\">Sources<\/h4>\n\n\n\n<ul style=\"font-size:16px\" class=\"wp-block-list\">\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">Inventory and working capital: is inventory a company investment?<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-dynamic-buffer-management-or-forecasting\/\">TOC or forecasting: TOC should drive day-to-day inventory decisions<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-buffer-zones\/\">TOC buffer zones: green, yellow, red<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">Buffer-based inventory management in trading and manufacturing companies<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-inventory-management-vs-min-max\/\">What is TOC inventory management and how is it different from the classic min-max method?<\/a><\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<div class=\"wp-block-cover alignfull is-light has-text-color has-link-color editorskit-no-desktop wp-elements-8\" style=\"border-top-left-radius:20px;border-top-right-radius:20px;border-bottom-left-radius:20px;border-bottom-right-radius:20px;color:#000000;padding-top:24px;padding-right:24px;padding-bottom:24px;padding-left:24px\"><span aria-hidden=\"true\" class=\"wp-block-cover__background has-white-background-color has-background-dim-100 has-background-dim\"><\/span><div class=\"wp-block-cover__inner-container is-layout-constrained wp-container-core-cover-is-layout-83bc96ca wp-block-cover-is-layout-constrained\">\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Managing inventory with dynamic buffers frees up cash in a fairly simple way: you order only what current demand calls for. So if you have too much of a product, even one that sells well, you order only enough to last until the next replenishment. Every product at every location gets a target stock level that covers actual sales until the next delivery arrives. Anything above that level is simply not reordered. That stock sells over the following weeks, and the cash comes back with it. Any money you didn&#8217;t spend on ordering surplus stock is available straight away to order other products or to put toward other business goals.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Dynamic Buffer Management (DBM) keeps those target levels realistic. If stock stays high for long enough, that&#8217;s a sign the buffer is too big, so it gets reduced. If a product keeps running short, its buffer goes up. Stock built up for a season or a promotion goes back to its normal level once the season or promotion is over.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">This article is part of our series:<\/p>\n\n\n\n<ul style=\"font-size:14px\" class=\"wp-block-list\">\n<li><a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">Inventory and working capital: is inventory a company investment?<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a><\/li>\n<\/ul>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-9 wp-block-paragraph\" style=\"font-size:20px\">Why does cash get tied up in inventory in the first place?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Most finance managers will know the symptoms. Cash is short, the warehouse is full, stock turns too slowly, and yet the products customers actually want are somehow the ones that are out of stock. What&#8217;s harder to see is how the company ended up there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">It&#8217;s rarely down to one big mistake. As we explained in our article on <a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">where working capital gets tied up in inventory<\/a>, the problem builds up from small decisions that made perfect sense at the time. A few typical examples: a supplier offered free delivery above a certain order value, so the order was made bigger. Stock was increased because a supplier was unreliable, but when the supplier&#8217;s reliability got back to where it had been, the stock was never brought back down. Christmas products gradually became part of the permanent range. Demand for a product group dropped, but the order size stayed the same.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">What these cases have in common is that the stock level stayed the same while everything around it changed. Min-max settings can be reviewed regularly, and some companies do that, especially with the help of AI. But where nobody touches them for months at a time, surplus and shortages tend to grow along with the inventory. We look at this in more detail in <a href=\"https:\/\/www.stockm.eu\/en\/why-min-max-doesnt-work\/\">Why min\u2013max usually doesn&#8217;t work<\/a>.<\/p>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-10 wp-block-paragraph\" style=\"font-size:18px\">How does a dynamic inventory buffer work?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">In <a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">TOC inventory management<\/a>, a buffer is the stock you deliberately keep of one product at one location so that it stays available until the next replenishment arrives. Its size depends on how much of that product actually sells or gets used there.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The buffer has to cover the order cycle plus the lead time. In StockM&#8217;s <a href=\"https:\/\/www.stockm.eu\/en\/toc-buffer-zones\/\">buffer zones example<\/a>, a product is ordered every four weeks and arrives within a week, so the buffer needs to cover five weeks of consumption. Buffer size also depends on how much consumption varies and how important the product is.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The buffer is then split into green, yellow and red zones, each set as a share of the buffer. Green means there&#8217;s enough stock. Yellow means stock is going down the way it should. Red means the product is at risk of running out and someone needs to act today. Over time, the way stock moves between the zones also shows whether the buffer itself is still the right size.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">What matters most for cash is how orders are calculated. On every ordering day, you order the quantity that brings the product back up to its buffer level, counting stock on hand, stock already on order and stock in transit. After a few slower weeks, that order is small, and sometimes zero. A fixed, regular schedule decides when you order, and consumption decides how much. We explain this difference in more detail in <a href=\"https:\/\/www.stockm.eu\/en\/toc-inventory-management-vs-min-max\/\">What is TOC inventory management and how is it different from the classic min-max method?<\/a><\/p>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-11 wp-block-paragraph\" style=\"font-size:18px\">How can you actually release cash from inventory?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The stock sitting in your warehouse today is the result of the way you manage inventory now. If you want a different result, you have to do things differently from how you&#8217;ve done them so far. So changing how you manage inventory starts with changing how you think about it. Managing inventory with dynamic buffers fundamentally changes the logic that was, and still is, standard practice for many companies and inventory managers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Managing inventory and building orders around buffers first of all stops you from buying unnecessary stock again, while still protecting your most important products. In practice, the cash usually comes from five places:<\/p>\n\n\n\n<ol style=\"font-size:14px\" class=\"wp-block-list\">\n<li>Surplus that simply isn&#8217;t replenished. Say you have 900 units of a product and its buffer is 600. The next few orders will be small or zero until stock settles back at the buffer level. No write-offs and no special projects. The cash comes back gradually through normal sales.<\/li>\n\n\n\n<li>Buffers that are too big. A product that stays in the green zone month after month has a bigger buffer than it needs. StockM manages buffers dynamically, so it would suggest reducing it. If that doesn&#8217;t happen, the buffer size is being driven by something else, such as a large minimum order quantity for the product (usually set by the supplier).<\/li>\n\n\n\n<li>How often you order. Because the buffer covers the order cycle plus the lead time, moving from monthly orders to orders every two weeks shortens the period the buffer has to cover. But this comes at a price. More orders can mean higher ordering or transport costs, and suppliers&#8217; minimum order quantities don&#8217;t go away. It&#8217;s a commercial decision that purchasing and finance should make together.<\/li>\n\n\n\n<li>Temporary stock needs to end on time. Seasons and promotions need stock before the demand is there, and that&#8217;s where forecasts and commercial plans do their job, as we explain in <a href=\"https:\/\/www.stockm.eu\/en\/toc-dynamic-buffer-management-or-forecasting\/\">TOC or forecasting<\/a>. The cash problem usually comes later, when the raised level quietly stays put in the warehouse. If every temporary buffer change has an end date, most of that problem goes away.<\/li>\n\n\n\n<li>Slow-moving or obsolete products. Some stock won&#8217;t sell on its own, however long you wait. The sooner you spot it, the more options you still have to move it, reprice it, send it back to the supplier or stop selling it. We cover these options in the section <a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">When does inventory stop creating value?<\/a> of our main article.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">All of this works in the other direction too. Products that keep dropping into the red zone get bigger buffers, so some of the cash you free up can be reinvested where it will create real value. In our view, that&#8217;s usually the right call.<\/p>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-12 wp-block-paragraph\" style=\"font-size:18px\">What does released cash mean in financial terms?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">When inventory goes down, the company gets back the cash that was tied up in stock. From a finance point of view, it&#8217;s important to keep three things apart: how much cash comes back, what the company saves each year, and what it means for profit.<\/p>\n\n\n\n<ol style=\"font-size:14px\" class=\"wp-block-list\">\n<li>Released cash comes back once. Say average inventory goes down by \u20ac400,000. The company gets that \u20ac400,000 back once and can use it for other things, but the same amount won&#8217;t simply appear again next month or next year.<\/li>\n\n\n\n<li>Releasing cash and reducing inventory brings one more benefit: smaller inventory costs less to hold. Storage, insurance and handling costs go down, and so does the risk of products becoming obsolete. How much you save depends on your company&#8217;s cost structure.<\/li>\n\n\n\n<li>Lower inventory doesn&#8217;t automatically mean higher profit. If surplus has to be sold off below cost, the cash comes back, but a loss may show up in the reports. That&#8217;s why spotting surplus or obsolete stock as early as possible helps keep those losses down. Even so, managing inventory according to real demand means you can use the cash you free up to fill gaps in stock. When you have what your customers need, you can grow your sales and their trust in you.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Tracking inventory turnover in days shows whether reducing inventory and changing the way you manage it is paying off. Inventory turnover in days is defined as the average number of days a company holds its inventory before selling it. Average inventory is the average of the inventory at the start and the end of the period:<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px;font-style:italic;font-weight:100\">Inventory turnover in days = average inventory for the period \u00f7 cost of goods sold \u00d7 number of days in the period<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\"><strong>IMPORTANT! <\/strong>Always look at this figure together with the availability of your most important products, in other words, together with lost sales. If inventory days are going down while shortages are going up, you&#8217;re cutting inventory in the wrong places.<\/p>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-13 wp-block-paragraph\" style=\"font-size:18px\">How does StockM use dynamic inventory buffers?<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">StockM is an assortment and inventory management system built on TOC and DBM. Every product at every storage location gets a buffer that is continuously updated based on actual consumption (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a>&#8220;), and dynamic buffers adjust to sales flow and lead times (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/inventory-management-retail-perishable-goods\/\">Retail and Perishable Goods<\/a>&#8220;). On ordering day, StockM suggests the quantity needed to top up the buffer, and when demand is low, that quantity can be zero (see &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">Buffer-based inventory management in trading and manufacturing companies<\/a>&#8220;).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">StockM also flags products whose buffers are consistently too big or too small, so the inventory manager can review them and accept or reject the suggestion. In practice, though, retail companies most often have dynamic buffers adjusted automatically for every product. Promotions and seasons, meanwhile, are planned in advance in the promotions and seasons module and entered into StockM, which raises the buffers when the time comes and automatically sets them back to their previous level once it&#8217;s over. Every day, inventory managers see clear priorities in the system for which orders and stock situations to deal with first, so they can focus their attention and effort where it will make the biggest difference.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">In more than 15 years of working with trading and manufacturing companies, we&#8217;ve seen total inventory levels reduced by 15-30% within 12-24 months.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"padding-top:20px;font-size:18px\"><strong>Hypothetical example<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px;font-style:italic;font-weight:100\">The figures below are made up to illustrate the calculation. This is not a client case. We assume stable demand, a reliable supplier, and a buffer based on the highest weekly sales during the replenishment time.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">A wholesale company sells a product that costs \u20ac20 per unit. It sells about 100 units a week, and up to 120 in a busier week. Orders go out every four weeks, and the goods arrive a week later. Out of habit, the team orders up to a maximum of 900 units.<\/p>\n\n\n\n<figure style=\"font-size:14px\" class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><td><strong>Scenario<\/strong><\/td><td><strong>Weeks covered<\/strong><\/td><td><strong>Buffer (units)<\/strong><\/td><td><strong>Inventory value at cost<\/strong><\/td><\/tr><\/thead><tbody><tr><td>Current practice: ordering up to a maximum of 900 units<\/td><td>not linked to lead time or order frequency<\/td><td>900<\/td><td>\u20ac18,000<\/td><\/tr><tr><td>Dynamic buffer, ordering monthly<\/td><td>4 + 1 = 5<\/td><td>5 \u00d7 120 = 600<\/td><td>\u20ac12,000<\/td><\/tr><tr><td>Dynamic buffer, ordering every two weeks<\/td><td>2 + 1 = 3<\/td><td>3 \u00d7 120 = 360<\/td><td>\u20ac7,200<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Once the team switches to a 600-unit buffer, the 300 units above it are no longer reordered. At 100 units a week, they sell out in about three weeks and bring back around \u20ac6,000. If the supplier can deliver every two weeks at an acceptable price, the buffer could come down to 360 units, which would free up about \u20ac10,800 compared with the old maximum.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">Keep in mind that these are target levels, not average inventory. Keep an eye on the buffer status over the next few months. If the product starts running short regularly, the buffer is too small and needs to go back up.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"padding-top:20px;font-size:18px\"><strong>StockM client: household goods retailer<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px;font-style:italic;font-weight:300\">This is an ongoing StockM project, and the client&#8217;s name isn&#8217;t disclosed. The implementation is still in progress, so what follows are the opportunities the project manager has seen so far, not measured results.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The client is a mid-sized retailer with eight stores selling long-life household goods. The main reason the company decided to bring in an inventory management system was a constant shortage of working capital combined with constant stockouts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The company&#8217;s usual practice was to keep large quantities of its best-selling products in the warehouse so that it would never lose a sale to a stockout. It looked like a sensible way to make sure the most important products were always available. But that decision tied up a large share of the company&#8217;s working capital.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The obvious place to look for cash seemed to be somewhere else: in slow-moving and non-moving stock. The company has both, and getting cash out of them would be ideal. The trouble is that nobody wants to buy those products. They&#8217;re hard to sell off, and the cash comes back slowly, if it comes back at all.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">That&#8217;s where the project manager sees a bigger opportunity to release tied-up cash faster. When every product is managed according to actual consumption and replenishment time, excess stock of good sellers can come down to a buffer that still keeps them available. Those products keep selling, so the surplus turns into cash through normal trading, and the company can invest that cash in its further growth. Work on slow-moving and non-moving stock still has to happen in parallel, but it no longer carries the job of generating all the cash on its own.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"font-size:16px\">The project was another reminder that implementing StockM is about more than installing software. The bigger change is in how the team manages inventory day to day, and it&#8217;s that change in approach that delivers results.<\/p>\n\n\n\n<p class=\"has-theme-primary-color has-text-color has-link-color wp-elements-14 wp-block-paragraph\" style=\"font-size:18px\">Frequently asked questions<\/p>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1793614360457\"><strong class=\"schema-faq-question\"><strong>How quickly do dynamic buffers help release cash?<\/strong><\/strong> <p class=\"schema-faq-answer\">It depends on how quickly the product sells. Surplus of a fast-moving product can be gone within a few order cycles. Slow movers take longer, and some surplus won&#8217;t sell off without someone actively deciding what to do with it. Expect the cash to come back over a few months, not overnight.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793614378206\"><strong class=\"schema-faq-question\"><strong>Don&#8217;t smaller buffers mean more stockouts?<\/strong><\/strong> <p class=\"schema-faq-answer\">Not if they&#8217;re calculated from real consumption and replenishment time and checked against buffer status. If a product keeps dropping into the red zone, its buffer is increased.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793614388580\"><strong class=\"schema-faq-question\"><strong>Do I need to change my ERP to implement StockM?<\/strong><\/strong> <p class=\"schema-faq-answer\">No. StockM runs as a separate system alongside your ERP and needs regularly updated data from your accounting system (stock balances, sales, replenishments, transfers). Inventory management and order building move over to StockM.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1793614400039\"><strong class=\"schema-faq-question\"><strong>Does this work for manufacturers?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, when you manage stock of components and finished goods (read more in &#8220;<a href=\"https:\/\/www.stockm.eu\/en\/inventory-management-manufacturing\/\">Manufacturing<\/a>&#8220;).<\/p> <\/div> <\/div>\n\n\n\n<p class=\"wp-block-paragraph\" style=\"padding-top:20px;font-size:18px\"><strong>Sources<\/strong><\/p>\n\n\n\n<ul style=\"font-size:14px\" class=\"wp-block-list\">\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">Inventory and working capital: is inventory a company investment?<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-dynamic-buffer-management-or-forecasting\/\">TOC or forecasting: TOC should drive day-to-day inventory decisions<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-buffer-zones\/\">TOC buffer zones: green, yellow, red<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/buffer-inventory-management\/\">Buffer-based inventory management in trading and manufacturing companies<\/a><\/li>\n\n\n\n<li>StockM: <a href=\"https:\/\/www.stockm.eu\/en\/toc-inventory-management-vs-min-max\/\">What is TOC inventory management and how is it different from the classic min-max method?<\/a><\/li>\n<\/ul>\n<\/div><\/div>\n\n\n\n<p class=\"has-text-align-center has-larger-font-size wp-block-paragraph\" style=\"padding-top:40px;padding-bottom:20px\">Read more articles<\/p>\n\n\n<ul class=\"wp-block-latest-posts__list is-grid columns-3 wp-block-latest-posts is-layout-grid wp-container-core-latest-posts-is-layout-0fed8f92 wp-block-latest-posts-is-layout-grid\"><li><div class=\"wp-block-latest-posts__featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"169\" src=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/11\/atsargu-valdymas-sandelis-300x169.webp\" class=\"attachment-medium size-medium wp-post-image\" alt=\"Atsarg\u0173 valdymas \u012fmon\u0117s sand\u0117lyje\" style=\"max-width:300px;max-height:300px;\" srcset=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/11\/atsargu-valdymas-sandelis-300x169.webp 300w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/11\/atsargu-valdymas-sandelis-768x432.webp 768w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/11\/atsargu-valdymas-sandelis.webp 840w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/\">How does managing inventory with dynamic buffers help release cash tied up in stock?<\/a><div class=\"wp-block-latest-posts__post-excerpt\">Managing inventory with dynamic buffers frees up cash in a fairly simple way: you order only what current demand calls for. So if you have too much of a product, even one that sells well, you order only enough to last until the next replenishment. Every product at every location gets a target stock level that covers actual sales until the next delivery arrives. Anything above that level is simply not reordered. That stock sells over the following weeks, and the cash comes back with it. Any money you didn&#8217;t spend on ordering surplus stock is available straight away to order other products or to put toward other business goals.<\/div><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"169\" src=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/kur-atsargose-isaldyti-pinigai-300x169.webp\" class=\"attachment-medium size-medium wp-post-image\" alt=\"Kur atsargose \u012f\u0161aldyti pinigai?\" style=\"max-width:300px;max-height:300px;\" srcset=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/kur-atsargose-isaldyti-pinigai-300x169.webp 300w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/kur-atsargose-isaldyti-pinigai-768x432.webp 768w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/kur-atsargose-isaldyti-pinigai.webp 1000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/www.stockm.eu\/en\/working-capital-get-tied-up-in-inventory\/\">Where does working capital get tied up in inventory?<\/a><div class=\"wp-block-latest-posts__post-excerpt\">Working capital is rarely tied up in inventory because of one big, obvious mistake. More often, it builds up gradually through many smaller decisions: ordering quantities set to meet a supplier\u2019s minimum, safety stock that is no longer needed, products that sell more slowly than before, or inventory held in one location when it is needed somewhere else.<\/div><\/li>\n<li><div class=\"wp-block-latest-posts__featured-image\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"169\" src=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/ar-atsargos-yra-investicija-300x169.webp\" class=\"attachment-medium size-medium wp-post-image\" alt=\"Ar atsargos yra ivesticija?\" style=\"max-width:300px;max-height:300px;\" srcset=\"https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/ar-atsargos-yra-investicija-300x169.webp 300w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/ar-atsargos-yra-investicija-768x432.webp 768w, https:\/\/www.stockm.eu\/wp-content\/uploads\/2026\/09\/ar-atsargos-yra-investicija.webp 1000w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/div><a class=\"wp-block-latest-posts__post-title\" href=\"https:\/\/www.stockm.eu\/en\/is-inventory-an-investment\/\">Inventory and working capital: is inventory an investment for a business?<\/a><div class=\"wp-block-latest-posts__post-excerpt\">In the case of a working capital shortage in a business, inventory is one of the first things that managers consider. And the first question usually is \u201cHow much inventory can we cut?\u201d\n\nHowever, it is a question about the money that has been previously invested into inventory and the chance to free up some of it. Indeed, inventory is not a storage cost nor a balance sheet entry. It is money that is deliberately invested into the supply chain in order for the company to be able to make sales, deliver services, and provide production or supply continuity.<\/div><\/li>\n<\/ul>","protected":false},"excerpt":{"rendered":"<p>Managing inventory with dynamic buffers frees up cash in a fairly simple way: you order only what current demand calls for. So if you have too much of a product, even one that sells well, you order only enough to last until the next replenishment. Every product at every location gets a target stock level that covers actual sales until the next delivery arrives. Anything above that level is simply not reordered. That stock sells over the following weeks, and the cash comes back with it. Any money you didn&#8217;t spend on ordering surplus stock is available straight away to order other products or to put toward other business goals.<\/p>\n","protected":false},"author":3,"featured_media":6648,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[450],"tags":[],"class_list":["post-6667","post","type-post","status-publish","format-standard","has-post-thumbnail","category-articles","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Managing inventory with dynamic buffers helps release cash<\/title>\n<meta name=\"description\" content=\"Managing inventory with dynamic buffers frees up cash in a fairly simple way: you order only what current demand calls for. 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Surplus of a fast-moving product can be gone within a few order cycles. Slow movers take longer, and some surplus won't sell off without someone actively deciding what to do with it. Expect the cash to come back over a few months, not overnight.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614378206","position":6,"url":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614378206","name":"Don't smaller buffers mean more stockouts?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Not if they're calculated from real consumption and replenishment time and checked against buffer status. If a product keeps dropping into the red zone, its buffer is increased.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614388580","position":7,"url":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614388580","name":"Do I need to change my ERP to implement StockM?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"No. StockM runs as a separate system alongside your ERP and needs regularly updated data from your accounting system (stock balances, sales, replenishments, transfers). Inventory management and order building move over to StockM.","inLanguage":"en-US"},"inLanguage":"en-US"},{"@type":"Question","@id":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614400039","position":8,"url":"https:\/\/www.stockm.eu\/en\/inventory-management-dynamic-buffers-release-cash\/#faq-question-1793614400039","name":"Does this work for manufacturers?","answerCount":1,"acceptedAnswer":{"@type":"Answer","text":"Yes, when you manage stock of components and finished goods (read more in \"<a href=\"https:\/\/www.stockm.eu\/en\/inventory-management-manufacturing\/\">Manufacturing<\/a>\").","inLanguage":"en-US"},"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/posts\/6667","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/comments?post=6667"}],"version-history":[{"count":6,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/posts\/6667\/revisions"}],"predecessor-version":[{"id":6676,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/posts\/6667\/revisions\/6676"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/media\/6648"}],"wp:attachment":[{"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/media?parent=6667"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/categories?post=6667"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.stockm.eu\/en\/wp-json\/wp\/v2\/tags?post=6667"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}