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Playbook · PVF Distribution

How to free up working capital tied in inventory in PVF Distribution (2026)

Last updated September 2026

The short answer

Release the cash frozen in stock without hurting service. 4 steps, in order, for a pvf distribution operation.

What you are working against in PVF

  • Enormous SKU counts hide slow movers
  • Specialized parts assumed 'unforecastable'
  • Working capital buried in never-selling stock

Before you start: where PVF usually sits

MetricTypical for PVFWhat good looks like
Days Sales of Inventory 75–140 days Deep SKU tails hide the worst offenders
Inventory Turnover Ratio 2–4 turns Deep tails cap turns; target dead stock
Inventory Carrying Cost 25–38% / yr Deep tails raise the risk component
GMROI 1.6–2.6 Deep tails drag the ratio down

Published ranges, not targets. Take your own baseline before step one.

The steps

  1. 1Raise inventory turns / cut DSI on the SKUs holding the most cash
  2. 2Remove excess and obsolete stock that never sells
  3. 3Right-size safety stock without dropping fill rate
  4. 4Give finance one trustworthy view of inventory value and risk

Why it pays off

20–30% / year
Inventory carrying cost typically runs 20–30% of inventory value per year (often 25–40% for wholesale distributors).
Institute for Supply Management (via NetSuite)
20–30%
AI-driven optimization can cut inventory 20–30% while holding service levels, and reduce forecasting error up to 50%.
Epicor / MDM
~25% / year
Excess and obsolete inventory costs the typical distributor about 25% of its value every year in storage, shrinkage, and cost of capital.
Industrial Supply Magazine

Frequently asked questions

How do you tell whether this is working in pvf distribution?

Recompute the same way each period. Days Sales of Inventory: DSI = (Average Inventory ÷ Cost of Goods Sold) × 365. Inventory Turnover Ratio: Inventory Turns = Cost of Goods Sold ÷ Average Inventory. Inventory Carrying Cost: Carrying Cost % = (Capital + Storage + Service + Risk costs) ÷ Average Inventory Value. GMROI: GMROI = Gross Margin $ ÷ Average Inventory Cost.

What does PVF start from?

Days Sales of Inventory of 75–140 days is the published band for pvf distribution — deep SKU tails hide the worst offenders. The 4 steps above are the same in any sector; the band you start from is not.

See what your inventory is really costing you.

Tell us where the cash is trapped — excess stock, idle surplus, slow RFQs — and we'll show you the outcome Maintained can unlock.

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