INSIGHTS
Perspectives on Inventory, Fill Rates, S&OP, and EBITDA
When prior fixes haven't stuck, the first step is to understand why. These insights show how we think about the problems that manufacturers and distributors are actually facing.
These insights are built on a simple principle: Speed = Clarity x Trust
When your team has clear data and trusts the process, decisions get faster, and execution improves. That is what these insights are about.
We work with PE-backed and privately held manufacturers and distributors in the $50M to $350M range, including building products, industrial components, specialty chemicals, and consumer goods.
Why Your Inventory Number Is Lying to You
A CFO of an electrical components distributor once told me, "The more inventory we have, the more we can borrow against." He had $54M in stock and fill rates in the low 70s. Customers were leaving.
That is not an asset. That is cash frozen in place, eroding EBITDA.
The pattern is the same in nearly every engagement: each function optimizes its own silo. Nobody optimizes the business. The fix is not a new system. It is one plan that Sales, Operations, and Finance all own together, with leadership in the room to make decisions.
When that happens, inventory comes down and fill rates go up. Not competing goals. The same goal, executed properly.
Published March 2026
Articles
Best Practices That Don't Fit (January 2026)
At Goodyear, I learned "Best Practices."
Working with PE taught me something different.
Early in my PE work, a $120M chemical company brought me in 15 months post-acquisition. Service levels were declining. The Operating Partner wanted S&OP implemented fast.
I walked in with my Goodyear playbook. The same process that worked for a team of 5
At Goodyear, I learned "Best Practices."
Working with PE taught me something different.
Early in my PE work, a $120M chemical company brought me in 15 months post-acquisition. Service levels were declining. The Operating Partner wanted S&OP implemented fast.
I walked in with my Goodyear playbook. The same process that worked for a team of 50+ people.
Six weeks later, their five-person ops team hadn't made any progress. Too many steps. Too much data gathering. The process was drowning them.
The CEO pulled me aside: "This might work at Goodyear. It doesn't work here."
He was right.
Here's what I learned: With 2-4 years until exit, you don't have time for over-engineered solutions. The right process isn't the most impressive one. It's the one your team can actually execute.
We made the process fit the business. We stripped it down to five steps and focused on decisions instead of debates. This enabled the team to implement a process in 60 days instead of 12 months.
The result: 12% improvement in fill rate with an 8% reduction in inventory, AND the team hit their EBITDA targets for exit.
Now, when I work with $50M-$350M portfolio companies, I ask first: "What can your team actually execute with the people, resources, and time you have?"
Look at your current initiatives and ask yourself whether the solution is sized for YOUR business or someone else's.
Published January 2026
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Masquerading Productivity (September 2025)
Every toilet in this stack is a pile of cash.
In 1996, I was a rookie ceramic engineer in Brazil. That is me, on a Saturday, checking on production. What looked like productivity was really trapped working capital. Raw material, labor, and overhead literally gathering dust.
The lesson still pays dividends today: a process is definable, pred
Every toilet in this stack is a pile of cash.
In 1996, I was a rookie ceramic engineer in Brazil. That is me, on a Saturday, checking on production. What looked like productivity was really trapped working capital. Raw material, labor, and overhead literally gathering dust.
The lesson still pays dividends today: a process is definable, predictable, repeatable, and trainable. If you are missing one of those elements, you do not have a process.
Fast forward to today. Same pattern, different plant. Forecast optimism outpaces reality and creates excess inventory. "Just-in-case" safety stock becomes an EBITDA drag. Misaligned Sales and Operations teams create board-level headaches.
Here is a quick test: pull last month's WIP and FG aging report. If more than 15% of your inventory is over 120 days old, you are tying up 4 to 7 points of working capital.
Need help making sense of your inventory and where your cash is frozen?
Published September 2025
Guaranteed 3:1 return.
Fixed-fee pricing. No surprises.
Where Did Our Cash Go? (July 2025)
Inventory was up 23%. Cash was gone.
The CFO of the $85M capital equipment manufacturer asked, "Why is all our cash tied up in inventory?" He didn't get a straight answer. Just awkward silence. The VP Supply Chain wouldn't make eye contact.
Here is what the CFO was seeing: working capital ballooning, stockouts even though inventory was over
Inventory was up 23%. Cash was gone.
The CFO of the $85M capital equipment manufacturer asked, "Why is all our cash tied up in inventory?" He didn't get a straight answer. Just awkward silence. The VP Supply Chain wouldn't make eye contact.
Here is what the CFO was seeing: working capital ballooning, stockouts even though inventory was overflowing, and a credit line that was maxed out. Classic inventory bloat. But where do you start?
Try an "Inventory Split." It is a simple five-minute exercise using data you already have. Total up your inventory across raw materials, WIP, and finished goods, then break it down by percentage in each category.
Now you have a roadmap. If raw materials are the tallest bar, the issue is procurement discipline. If WIP dominates, operations needs to be streamlined. If finished goods are overweight, it is time to pressure-test the forecast.
That one graph gave the CFO answers. And it gave the VP Supply Chain a place to start. A tall red bar on the split chart gets everyone's attention.
In nine months we freed up $6.9M in cash from inventory and closed an offsite warehouse.
Need help making sense of your inventory and where your cash is frozen?
Published July 2025
Guaranteed 3:1 return.
Fixed-fee pricing. No surprises.