Inventory Positioning Across Two Warehouses

What the data says: WH-B underperforms on fill (91.4% vs 96.2%) and is disproportionately loaded with slow movers (48% vs 31% of positions). Carrying the full 9,500-SKU catalog in a 12,000-position building is the likely cause: the small warehouse is congested with low-velocity stock, which raises pick-path interference and replenishment complexity and depresses fill.

When consolidation helps: slow movers have low, relatively stable demand, so pooling them in one location reduces total safety stock (square-root-of-N effect) and frees WH-B positions for fast movers that serve local small-order demand. This directly attacks the turns decline (6.1→5.3) and the 14% inventory value rise.

When it hurts: if any slow-mover demand is time-critical near WH-B, consolidation adds a transfer leg and lengthens lead time, risking the 95% target for those lines. The sales director's concern is valid only for the subset of slow movers that are locally demanded and urgent.

Judgment: consolidate the majority of slow movers to WH-A, but segment first. Keep a curated local assortment at WH-B for slow movers with demonstrated local demand and short customer tolerance. This captures most of the safety-stock and space benefit while protecting local service.

Segmentation rule (two-dimensional):

1. Velocity class. Rank SKUs by picks/lines per period. Fast movers (top ~40%) stay in both warehouses to support local small-order demand. Slow movers (bottom 30%) are consolidation candidates.

2. Local demand concentration. For each slow mover, compute the share of regional demand originating within the WH-B service radius. If a slow mover has meaningful local demand and a short customer tolerance window, it stays; otherwise it moves.

3. Decision matrix:

   • Fast + local demand → both warehouses.
   • Fast + no local demand → WH-A only, with transfer capability.
   • Slow + local/urgent → keep at WH-B (curated assortment).
   • Slow + non-local or long tolerance → WH-A only.

4. Capacity check. Moving most slow movers should free a large share of WH-B's 12,000 positions (slow movers are ~48% today). Reinvest freed positions in fast movers to improve the 91.4% fill.

Expected outcome: WH-B becomes a fast-mover service node; WH-A becomes the slow-mover pool. This aligns inventory with demand geography rather than duplicating the full catalog everywhere.

Why turns fell and value rose: duplicating 9,500 SKUs in both buildings means each slow mover is stocked twice, inflating safety stock and value while generating few picks. That mathematically drags turns down (value up, COGS flat).

How the plan reverses it:

• Value down: pooling slow movers into WH-A removes duplicate safety stock; the square-root-of-N pooling effect reduces buffer for the consolidated population.
• Turns up: removing slow movers from WH-B frees positions for fast movers, raising picks per position and per dollar of inventory. Fewer dollars tied in low-velocity stock raises the turns ratio directly.
• Fill up at WH-B: less congestion and clearer pick paths for fast movers should lift the 91.4% toward target.

Main risk to monitor: service degradation near WH-B for any slow mover that was moved but turns out to have urgent local demand. Track line fill for WH-B customers and the transfer lead time on moved SKUs. Set a trigger: if WH-B fill on moved SKUs drops below target or local complaints rise, return the specific SKUs to the curated local list. Monitor turns and inventory value monthly to confirm the expected reversal.