Overstocking: A Hidden Threat to Business Stability
Warehouse overstocking is one of the most common — and often underestimated — issues faced by companies in Uzbekistan. On the surface, a fully stocked warehouse may seem like a sign of preparedness. In reality, it's frozen capital, rising costs, declining turnover, and ultimately a threat to the financial stability of the business.
Main Causes of Overstocking
The roots of overstocking usually lie in management errors: inaccurate demand forecasting, lack of inventory norms, emotionally driven purchasing, poor turnover monitoring, and inefficient supplier management. Over time, these issues lead to warehouses being filled with slow-moving or outdated products that turn into liabilities rather than assets.
A Systematic Approach: Where to Start
This problem can only be solved with a structured approach. At KSP, we use a multi-level inventory management system, starting with product categorization. Through ABC analysis, we identify the most profitable items and focus attention on them. In parallel, XYZ analysis helps assess demand stability — whether there are seasonal patterns or erratic fluctuations.
If you're unsure which product groups generate profit and which are holding you back, the KSP Consulting team can conduct an ABC/XYZ analysis, highlight weak spots, and develop a practical action plan. This alone can optimize inventory and boost turnover within the first quarter.
Setting Stock Norms by Category
The next step is introducing stock norms by category. For instance, items in the AX category — stable and profitable — must always be in stock. For them, we define minimum stock levels, reorder points, and safety reserves. In contrast, CZ category items — low-turnover, unprofitable products with unpredictable demand — shouldn’t be stored at all. These should either be made-to-order or removed from the assortment.
Control and Early Warning
To make the system work, control mechanisms are essential. We implement early warning systems that track turnover daily, identify stuck items, expired stock, and deviations from seasonal trends. This allows timely intervention — not just damage control after the fact.
Rethinking Procurement Strategy
Procurement practices also need to evolve. Instead of "let’s buy more, just in case," we calculate optimal order sizes based on seasonality, trends, and sales activity. It’s also crucial to align procurement with marketing: when these departments work in isolation, duplication, excess inventory, and losses are inevitable.
Managing Dead Stock
Special attention should be given to dead stock. If a product hasn’t moved in 90+ days, it needs a concrete plan: discounts, sales, supplier returns, or disposal. Delaying these decisions leads to growing losses and locked-up working capital.
If your warehouse contains “dead” inventory that hasn’t sold in months, KSP Consulting will help you develop a liquidation strategy — from clearance sales and supplier returns to redistribution through partner channels. This can unlock millions of soums in frozen capital.
Automation and Digital Tools
Manual inventory control is no longer viable. The next step is automation. Modern systems allow you to monitor inventory in real time, generate automatic orders, and analyze forecasts. It's critical to integrate inventory with sales so that stock norms are calculated automatically and the system can respond to demand changes before shortages or overstocking occur.
Common Mistakes — and How to Avoid Them
From our consulting experience, the same inventory mistakes recur across businesses: emotional purchasing, fear of running out of stock, lack of analytics, reluctance to write off stock — all resulting in overstuffed warehouses. Without a system, there’s no resilience. Without analytics, no efficiency.
Where to Begin: A Step-by-Step Plan
Our advice is simple: start with diagnostics. Run an inventory audit, calculate category-level turnover, and identify problem areas. Then, implement norms, automate controls, train your team — and most importantly, analyze the data regularly. Continuous monitoring and parameter adjustments are what transform inventory chaos into a growth tool.
Final Thought
In Uzbekistan’s business environment, where many purchases are still made “just in case,” a structured approach to inventory management isn’t a luxury — it’s a necessity. Modern technologies and methods help keep your warehouse lean — free of excess, shortages, or frozen capital.
In a competitive market, survival doesn’t depend on who has more stock — but on who turns inventory faster, manages demand smarter, and controls finances better.
Ready to take control of your inventory and stop losing money in the warehouse?
KSP Consulting will help you build an effective stock management model — from analysis and norm setting to automation and real-time control. We know how to turn dead stock into working capital and build resilient inventory systems.