Inventory control
How to optimize structural steel stock
Balance service, capital, and risk with material-specific inventory policies.
- Published
- January 13, 2025
- Updated
- January 13, 2025
- 12 min read
Optimizing stock does not mean cutting it at any cost. It means using capital for materials that protect flow and buying to demand when the holding risk is higher.
Classify by impact
ABC analysis combines value, consumption, and criticality. A rarely used profile may still require tight control because of a project commitment.
- Classify by annual consumption value.
- Add criticality for project commitments.
- Review the classification quarterly.
Calculate reorder points
A purchasing trigger should cover demand during actual supply lead time plus safety stock justified by variability.
- Measure real supplier lead times, not estimates.
- Separate project demand from recurring demand.
- Adjust safety stock after demand changes.
Use supplier agreements
Framework agreements and vendor-managed inventory can improve availability without moving all material into the yard.
- Agree on specifications and service levels.
- Share a forward view of requirements.
- Measure complete and on-time deliveries.