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Playbook · Utilities & Power

How to free up working capital tied in inventory in Utilities & Power (2026)

Last updated September 2026

The short answer

Release the cash frozen in stock without hurting service. 4 steps, in order, for a utilities & power operation.

What you are working against in Utilities

  • Critical spares over-held 'just in case'
  • Long-tail inventory compounding carrying cost
  • Little visibility into what's truly redundant

Before you start: where Utilities usually sits

MetricTypical for UtilitiesWhat good looks like
Days Sales of Inventory 90–180+ days Critical spares inflate DSI; find the redundant tail
Inventory Turnover Ratio 1.5–3 turns Critical spares lower turns; above 3 is strong
Inventory Carrying Cost 25–40% / yr Long-held critical spares raise carrying cost

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 utilities & power?

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 Utilities start from?

Days Sales of Inventory of 90–180+ days is the published band for utilities & power — critical spares inflate DSI; find the redundant tail. 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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