Business Terms Dictionary

Strategic Inventory Positioning

Strategic Inventory Positioning is the process of determining the optimal locations for inventory within a supply chain to protect against variability, meet market demand efficiently, and maximize the use of working capital. © Copyright 2025 Demand Driven Institute. Used with permission.

What is it used for?


This approach is used to ensure that inventory is placed at key decoupling points where it can absorb demand and supply fluctuations, reduce lead times, and improve service levels while minimizing excess stock. Proper positioning helps maintain flow efficiency and prevents bottlenecks.


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In ForgeFlow Cloud ERP, Strategic Inventory Positioning is seamlessly integrated into the DDMRP framework, allowing businesses to identify and manage critical decoupling points thanks to the improved visibility. This ensures inventory is placed where it adds the most value, reducing risk and improving responsiveness without unnecessary overstocking.
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