From Stockroom to Strategy: Why Inventory Management is Now a Board-Level Decision

Inventory management has decisively moved out of the back-office and into the boardroom. In 2025, CEOs and CFOs routinely cite inventory strategy as a top priority in earnings calls and executive meetings, marking a sharp break from the era when stock control was considered a specialist’s job. This shift is driven by macroeconomic volatility, new consumer behaviors, and the direct link between inventory decisions and financial results.

Uncertainty Requires Stability — Inventory Should Be One

Modest growth, persistent uncertainty, and margin pressure are putting inventory on center stage. Price sensitivity and changing buying patterns mean retailers face daily swings in demand, making real-time visibility, smarter forecasting, and coordinated fulfillment integral to meeting customer expectations and protecting profitability. The consequences of missteps are more severe than ever: overstocks trap billions in working capital and spark profit-eroding markdowns, while stockouts drive consumers to competitors and leave lasting gaps in loyalty.

What sets leading retailers apart is their speed and rigor in decision-making. The lines between store, warehouse, and e-commerce have blurred, with omnichannel operations demanding precise inventory accuracy at both item and location level so brands can deliver reliably on every promise. Misses cascade quickly: a delayed replenishment can lead to missed sales, lost customers, and ripple effects across the P&L.

Availability is Conversion and Conversion is Loyalty

Availability isn’t just about meeting demand; it creates conversion and builds loyalty. Most shoppers won’t wait for a restock. If an item isn’t available, they’ll buy elsewhere, turning losses into permanent share shifts. Excess inventory is just as damaging, leading to forced markdowns, inflated costs, and weakened brand equity. The boardroom now demands improvements in both directions.

The foundation for robust inventory strategy is a current, unified view of stock that connects every function — merchandising, supply chain, stores, e-commerce, and finance — to a single truth. Leaders are adopting tighter review cycles, real-time demand sensing, and exception-focused workflows so teams can resolve issues fast and prevent recurrence. Automated monitoring, smart analytics, and artificial intelligence-powered forecasting tools are increasingly common as companies seek to move beyond spreadsheets and gut feel.

Financial measurement is key. Metrics like aged inventory, inventory turns, gross margin return on inventory investment, and markdown rates are receiving board-level scrutiny. When these key performance indicators are shared across executive dashboards, cross-functional teams can prioritize actions and trade-offs, responding nimbly to market changes and operational risks.

A Pragmatic Playbook for Board-Level Inventory

• Establish a continuously reconciled view of inventory across all channels.
• Use advanced analytics and AI to forecast demand and optimize allocation.
• Focus store teams on exception-based tasks and rapid correction.
• Align omnichannel KPIs — availability, fulfillment, gross margin — with financial outcomes.
• Review root causes frequently to prevent recurring losses.
• Scale winning tactics quickly, backed by top-down governance and clear incentives.

As 2025 heads into its final quarter, retail leaders are doubling down on agility and data-driven discipline. Automated replenishment, multi-location visibility, and cross-functional inventory “war rooms” are preempting disruptions and aligning organizations on shared goals. C-suite attention to inventory strategy is now seen not just as risk management, but as a competitive asset in an environment shaped by volatility and high consumer expectations.

Looking to 2026, the industry faces ongoing uncertainty but also fresh opportunities. Rapid innovation in AI, fulfillment networks, and supply chain design will reshape how retailers sense, respond, and execute around inventory. The most resilient organizations will treat inventory not just as a number to reconcile, but as a lever for growth, loyalty and profitability.

Bruno Bakker is the director of iD Cloud North America at Nedap, a leader in digital twin technology, integrating IoT, RFID, vision, AI and SaaS into a powerful technology stack.