How much working capital can you free up from inventory without hurting service?
Get a first estimate in seconds. Then find which stock may be reduced while customer demand, production and service stay protected.
Estimate: annual COGS ÷ 365 × inventory days reduced. Use COGS on the same accounting basis as the inventory being assessed.
Too much inventory ties up cash. Too little can hurt service or stop production.
Food manufacturers need stock to keep production running and customers supplied. But every extra day of inventory keeps cash tied up in stock.
The calculator shows how much working capital could be freed up if inventory days fall by the amount you entered. The next step is to find the products, SKUs, batches and sites behind that amount.
Then check which stock is still needed for demand, safety stock, production or supply risk.
Before reducing stock, check demand, supply and production needs
A lower inventory target only works if customer service and production stay protected. Check each stock position against demand, supply and production needs before deciding what can be reduced.
Is the stock needed for confirmed orders, forecast demand or a service commitment?
How quickly can the stock be replenished? Check lead time, minimum order quantity (MOQ) and supplier reliability.
Is the stock needed for production, reserved, blocked, on quality hold or close to expiry?
Next, decide which stock is worth reviewing first by looking at stock value and the risk of reducing it.
Look at stock value and risk together
Start with stock where more working capital is tied up and the risk of shortages or production problems is lower. Use these three checks to decide what the team should review first.
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Older or slow-moving stock
A good place to look first, especially when demand has slowed or shelf-life risk is increasing.
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High stock value and cost
Higher-value stock ties up more cash and can cost more to finance, store and handle.
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Lower risk to service or production
Check demand, safety stock, lead times, production needs and quality status before reducing stock.
Critical materials, confirmed demand or constrained supply.
Start here. More cash is tied up with lower risk to service or production.
Less cash tied up and more reason to keep the stock.
Useful clean-up work, but with less working capital to free up.
Finance, Supply Chain and Operations need the same inventory numbers
Each team looks at the same stock from a different angle. They need the same stock value, demand, status and supply data before they can agree what can change.
Inventory value, inventory days, carrying cost, write-offs and cash.
Demand, forecast, safety stock, lead times, MOQ and supplier reliability.
Materials, packaging, batches, shelf life, quality status and the production plan.
What is needed: bring stock value, demand, status, shelf life and supply data together so the teams work from the same numbers and definitions.
Titan brings the inventory data together before AI starts looking for opportunities
Inventory value alone is not enough to decide what stock can be reduced. Titan brings ERP, WMS, planning and quality data together so stock value can be viewed alongside demand, status, supply and shelf life.
This creates the inventory and working-capital data that Titan Says and Ask Titan use in the next steps.
Operational systems → Titan Data & AI Foundation → inventory & working-capital data
Operational systems
ERP
stock value · purchase · cost
WMS
batch · location · status · age
Planning / demand
forecast · orders · safety stock
Quality
blocked · hold · expiry · release
Data & AI Foundation
Bring the inventory context together
1
Connect
bring ERP, WMS, planning and quality data together
2
Align
use the same products, sites, batches and definitions across sources
3
Add context
combine value with demand, status, supply and shelf life
Inventory & working-capital data
Inventory value
€5.2m
Inventory days
52
Available context
Page scenario
€767k
52 → 45 days
Used in the next step to show how Titan Says could identify the stock behind the opportunity.
Operational systems
ERP
value · cost
WMS
batch · status
Planning
demand · forecast
Quality
blocked · expiry
Titan
Data & AI Foundation
Connect and align the inventory context
Titan output
Inventory & working-capital data
Inventory value
€5.2m
Inventory days
52
Page scenario
€767k
52 → 45 inventory days
How Titan supports this decision · 2/3
ConceptTitan Says uses AI to find working-capital opportunities in the Titan data
Titan Says starts with the inventory and working-capital data already prepared in Titan. AI can check changes in inventory, demand, stock status, supply and shelf life together to find situations that may be worth reviewing.
In this example, the output is a €767k working-capital opportunity. The next step is to understand which product groups, SKUs and stock positions sit behind that amount.
Inventory & working-capital data
Inventory value
€5.2m
Inventory days
52
AI checks the data for opportunities
Compare related changes before bringing an opportunity to the team
1
Check changes
2
Compare context
3
Quantify the opportunity
Opportunity
€767k potential working capital to free up
Check the stock behind this amount against demand, status, supply and production needs.
Inventory days
52 → 45
Potential working capital
€767k
From Titan Says
€767k potential working capital to free up
Working capital by product group
Frozen A is largestStock requiring a closer look
No confirmed demand
€169k
Quality-blocked
€103k
Check reservations, production needs, safety stock and replenishment before reducing either amount.
Review high-value, lower-risk SKUs first
To move from 52 to 45 days, start with older or slow-moving stock with limited near-term demand.
Exclude reservations, required production stock, quality holds and stock needed to protect service.
Illustrative answers based on the working-capital opportunity above. The team still decides which stock can be reduced.
How Titan supports this decision · 3/3
Ask Titan helps your team investigate the opportunity
Titan Says has identified a €767k working-capital opportunity. Ask Titan lets Finance, Supply Chain and Operations trace that amount back to product groups, SKUs, batches and stock positions, then check what can be reduced without putting service or production at risk.
Which product groups make up the €767k?
Break the amount down by product group, SKU, batch or site.
How much has no confirmed demand or is blocked?
Separate stock that may be reducible from stock that still needs a closer operational check.
Which SKUs should we review first?
Prioritize by value, demand, safety stock, lead time, quality status and production needs.
Inventory and working capital questions
Short answers to common questions about inventory days, excess and slow-moving stock, carrying cost, safety stock and freeing up working capital in food manufacturing.
What is working capital tied up in inventory?
Inventory uses cash from the moment materials, semi-finished goods or finished products are purchased or produced until that inventory is sold and converted back into cash. Higher inventory therefore increases the amount of working capital tied up in the operation.
How do you calculate inventory days?
A common high-level formula is average inventory divided by annual cost of goods sold, multiplied by 365. The inventory value and COGS denominator should use a comparable scope and accounting basis.
How can you estimate how much working capital may be freed up by reducing inventory days?
As a high-level estimate, divide annual COGS by 365 to calculate daily cost flow and multiply that amount by the number of inventory days reduced. This gives a first estimate of potential working capital to free up. It does not mean all of that stock can be reduced safely.
Is older inventory automatically excess inventory?
No. Inventory age is a useful place to start. Older stock may still be required because of confirmed demand, long supplier lead times, minimum order quantities, safety stock, customer commitments or production requirements.
What is inventory carrying cost?
Inventory carrying cost is the annual cost of holding inventory. It can include financing, storage and handling, insurance, administration, expiry and obsolescence. Manufacturers should use the carrying-cost rate agreed by Finance.
What data is needed to reduce inventory safely?
Useful data includes inventory value, quantity, batch, location, stock status, reservations, demand, forecast, safety stock, supplier lead time, minimum order quantity, shelf life, quality status and production requirements.
How does Titan support inventory and working-capital analysis?
Titan brings together ERP, WMS, planning, quality and demand data. This lets Finance, Supply Chain and Operations work from the same stock value, demand, status, shelf-life and supply information.
How can Titan Says support inventory and working-capital decisions?
Titan Says can monitor inventory, demand and stock status and flag stock that may need attention, such as rising inventory days, stock without near-term demand, blocked stock or inventory close to expiry. A signal is a starting point; the team checks demand, supply, production and service before changing stock.
How does Ask Titan support inventory decisions?
Ask Titan lets teams check inventory questions in Microsoft Teams. Users can ask why stock was flagged, which SKUs make up the amount and how demand, reservations, stock status, supply and production needs affect the decision.
Where should a food manufacturer start?
Start with one product group, site or stock category. Estimate how much working capital could be freed up from a realistic reduction in inventory days, find the stock behind that amount and check demand, supply, production and service needs before changing inventory targets.
Your scenario shows €767k potential working capital to free up. Now find the stock behind it.
Start with one site, product group or inventory problem. We help find where working capital is tied up, which stock is worth reviewing and what data is needed to check it safely.
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