14 January 2026

When buffer stock is a liability

A planner in Toowoomba once showed me a mezzanine that everyone called “just in case.” The codes on it were slow. The mill that fed them was in another state and chronically late. The overflow was not a buffer against demand. It was a private warehouse for the mill, paid for by the buyer.

Business consulting for supply chain strategy spends too many hours celebrating inventory as resilience. Resilience has a cost curve. If the curve is never drawn, finance will still feel the working capital; they just will not know which supplier they are banking.

We asked for the mill’s on-time history by week, not by quarter. The late weeks clustered before school holidays, when the mill ran a shutdown it had not declared as a constraint. The Toowoomba pile rose in those weeks and never fully came down. Service to the DC in Brisbane looked stable. The balance sheet did not.

The fix was not a heroic destock. It was a review period, a conversation that named the shutdown, and a cap on the mezzanine that procurement could defend. Some codes stayed. The ones that existed only to hide lateness left. That distinction is the whole essay.

If your overflow has a nickname, treat the nickname as a smell. Bring the service curve to the next meeting. The Inventory Policy Intensive exists because this argument rarely fits in a stand-up.