09. Who Owns Inventory?

Picture this: It's Monday morning. You've just walked into a meeting where Finance is showing a chart of rising inventory levels. Someone from Supply Chain starts explaining why production or sourcing needed to build ahead. Then Sales jumps in with comments about changing market conditions. Before you know it, the room is like a tennis match with the blame ball being smacked back and forth across the table.

Sound familiar?

The question of "who owns inventory" is one I hear reasonably frequently. It's also one of those deceptively simple questions that reveals deeper organisational fault lines. Everyone points fingers, yet nobody seems to step up and claim ownership.

Let me be straight: The very fact that your organisation is debating this question signals something's not right with your inventory management approach.

The Traditional Answer vs. Reality

The consensus view (if we can call it that) is that Supply Chain Management typically owns inventory. This makes logical sense on the surface:

• SCM has the specialized knowledge to manage inventory

• Inventory management KPIs typically live within demand and supply planning teams

• Supply Chain has operational control and the expertise to turn inventory into fulfilment

But this is what I've learned: inventory is usually a symptom, not a problem. And symptoms don't have owners—root causes do.

Three Essential Perspectives on Inventory Ownership

1. Senior Management Should Own Inventory

When inventory is viewed as a strategic asset (which it absolutely should be), the responsibility for inventory strategy and governance must sit at a senior management level. This isn't optional—it's essential.

Senior leaders need to:

• Set clear inventory tactics that address seasonality, product launches, and safety stock needs

• Make deliberate cost/benefit decisions about inventory levels

• Hold teams accountable for execution

I've seen organisations where inventory grows unchecked because no executive is willing to take ownership of this strategic asset. When the CEO or leadership team abdicates this responsibility, departments start optimising for their own metrics at the expense of inventory performance.

2. Clarity and Consistency Are Non-Negotiable

Regardless of who technically "owns" inventory, what's absolutely vital is clarity on:

• What inventory you have (accurate counting and categorisation)

• Why you have it (strategic buffer vs. execution problem)

• How it's trending (consistent reporting)

• Who's responsible for action (clear accountability)

Without this transparency, you'll continue having the ownership debate while inventory builds up in your warehouses, eating into your working capital.

3. The Controversial But Effective Approach: Give It to Sales

Now, here's where I may ruffle some feathers. I've seen success when inventory accountability is placed with Sales and Marketing.

Why? Because Sales has the most direct ability to move inventory. When Sales is held accountable for:

• Demand forecasting accuracy

• Product assortment decisions

• Inventory turnover

• Revenue impact of unsold inventory

...magical things happen. Suddenly, those "must-have" product variants get more scrutiny. Forecast accuracy improves. And most importantly, when inventory builds up, creative solutions emerge to move it.

I've seen reductions in chronically overstocked inventory within months of shifting ownership to Sales. When the people forecasting demand feel direct accountability for the inventory that results, behaviours change quickly.

The Integrated Approach

Of course, no single department can manage inventory in isolation. The most effective approach I've seen is an integrated one where:

1. Senior management owns the inventory strategy

2. Sales owns the demand forecast and the responsibility to move excess

3. Supply Chain owns execution against the agreed plan

4. Finance provides the measurement and financial context

This integrated approach requires mature business processes that align demand, supply, and financial plans—like Integrated Business Planning (IBP) and Integrated Tactical Planning (ITP).

The Simple Truth

The real question isn't "who owns inventory?" but rather "why do we have this inventory?" If it's the result of an agreed-upon strategy, senior leadership owns it. If it's unplanned inventory due to forecast errors, the function that caused it technically "owns" it.

But either way, the demand side of the business is responsible for selling unwanted inventory, while everyone is accountable for solving the root causes that created excess inventory in the first place.

Start with these fundamentals:

1. Establish inventory as a strategic asset with senior-level ownership

2. Create absolute clarity on inventory reporting

3. Hold Sales accountable for forecast accuracy and inventory movement

4. Address root causes rather than symptoms

5. Implement integrated business processes for alignment

What's your experience with inventory ownership? Has making Sales accountable for inventory been tried in your organisation? I'd love to hear your perspective.

I'm just a regular IBP guy who's seen the inventory ownership question create more heat than light in countless organisations.

Want to learn more? Visit me at www.planninglab.co.nz

#IBP #SupplyChain #InventoryManagement #BusinessTransformation #IntegratedPlanning