---
title: "No Matter How Big Your Warehouse Is, It Will Be Filled with Inventory"
description: "In manufacturing, there is a strange phenomenon: no matter how large your warehouse is, it will be filled with inventory; no matter how many warehouses or storage locations you have, each will be full of stock. The size of the warehouse seems to determine the level of inventory. This article explains why this happens, citing a case where reducing warehouse space actually improved inventory turnover, and discusses the psychological and managerial reasons behind this phenomenon."
author: "New Distribution"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-04-21"
language: "en"
canonical: "https://xinjignxiao.com/en/articles/no-matter-how-big-your-warehouse-is-it-will-be-filled-with-inventory-97bc0140/"
markdown: "https://xinjignxiao.com/en/articles/no-matter-how-big-your-warehouse-is-it-will-be-filled-with-inventory-97bc0140.md"
original_source: "https://mp.weixin.qq.com/s/p47w-OdTW-d5bkzUSZ1LWg"
translation: "https://xinjignxiao.com/zh/articles/%E4%BD%A0%E6%9C%89%E5%A4%9A%E5%A4%A7%E7%9A%84%E4%BB%93%E5%BA%93-%E4%BD%A0%E7%9A%84%E4%BB%93%E5%BA%93%E5%B0%B1%E4%BC%9A%E5%A0%86%E6%BB%A1%E5%A4%9A%E5%B0%91%E5%BA%93%E5%AD%98-97bc0140.md"
attribution: "New Distribution — https://xinjignxiao.com/en/articles/no-matter-how-big-your-warehouse-is-it-will-be-filled-with-inventory-97bc0140/"
usage_policy: "https://xinjignxiao.com/ai-policy.txt"
---

# No Matter How Big Your Warehouse Is, It Will Be Filled with Inventory

> In manufacturing, there is a strange phenomenon: no matter how large your warehouse is, it will be filled with inventory; no matter how many warehouses or storage locations you have, each will be full of stock. The size of the warehouse seems to determine the level of inventory. This article explains why this happens, citing a case where reducing warehouse space actually improved inventory turnover, and discusses the psychological and managerial reasons behind this phenomenon.

In manufacturing, there is a very strange phenomenon: it seems that no matter how large your warehouse is, it will be filled with inventory; no matter how many warehouses (or storage locations) you have, each one will be full of stock! The bigger the warehouse, the higher the inventory! It's like living at home: no matter how big the house, after a while it feels cramped!
Why is this? Theoretically, the level of inventory control in a company should have no necessary connection with the physical size of the warehouse. However, in reality, this is not the case.
I personally experienced a case: In 2000, when we were just setting up our factory, the warehouse area was about 800 square meters. At that time, our warehouse manager was constantly complaining that there was no place for raw materials and finished goods, blaming purchasing for buying too much and production for making too many finished products. Sometimes, excess materials were even stored in the workshop or with logistics service providers. When we moved in 2002, because the workshop was expanded and the total area was fixed, we had to reduce the warehouse to less than 500 square meters. At first, there was really too much material and no place to put it, and the warehouse manager complained for a while. But after about six months, not only were materials no longer stored with logistics providers, but the workshop shelves were also removed because we adopted a PSMS system (a material delivery system we developed ourselves that automatically delivers materials from the warehouse to various workstations on the production line based on changes in production plans). The warehouse still had space for materials, and it was much tidier than before! The variety of products and the number of independently coded materials remained almost unchanged, only increasing. With sales basically flat, the average annual inventory turnover rate increased from about 20 times in 2000 to over 40 times in 2002!
Why is this? The summary is probably the following aspects:
First: It is related to people's psychology.
This is like our daily life: if the house is big, you can buy things casually and put them anywhere. Over time, the house gets filled with things you should have bought, shouldn't have bought, commonly used, rarely used, and bought but never used, everywhere! So the house seems smaller and smaller!
Purchasing and production control in manufacturing are, of course, more rational than household purchasing, especially for companies that successfully use ERP. But the key issue is that no matter how ERP plans and coordinates, the execution of the plan is done by people - ERP tells you to bring in 50 motors on March 10, but the buyer might find various reasons to bring the goods in on March 5! And they might even bring in more! Originally planned to produce only 5,000 finished products, but in the end, 6,000 or more might be produced. Why? Buying early, buying more, and producing more gives everyone a sense of security, and anyway, there is space to store it! Sales may not have much pressure either; it's okay if you can't sell things, but the most headache is when you have customer demand but no goods to sell!
Second: The larger the warehouse, the greater the management difficulty.
A key issue in warehouse management is how to ensure the accuracy of inventory data. If the warehouse area is large, the fixed-location management might not need to be done so well; after all, there is plenty of space. This can lead to confusion in inventory data, which can completely cause problems in MRP planning. Ultimately, what should come doesn't come, and what shouldn't come all comes. Inventory grows larger and larger, but material shortages become more frequent, and unplanned production stoppages increase. Finished goods that should be shipped cannot be shipped, creating a vicious cycle. Thus, inventory expansion becomes inevitable!
Third: The larger the warehouse, the more storage locations may be divided.
Precisely because the warehouse area is large enough, everyone treats the warehouse as a piece of meat (a resource to be exploited). Especially in larger manufacturing plants with many departments and institutions, everyone has different responsibilities, and everyone wants to have their own warehouse area (storage location), even HR and administration want a place in the warehouse. So you will find that every storage location has something in it, even if it's just production materials: the design and R&D department's storage location will have many new materials that no one knows whether they can be used, and no one dares to dispose of them; the IQC (incoming quality control) department will have materials waiting for inspection that never seem to be finished; the MRB (material review board) will accumulate more and more raw materials, finished goods, and semi-finished goods that are unusable and never get a conclusion; the purchasing department says to put the goods to be returned to suppliers in the warehouse for now, since we owe the supplier money, not the other way around; production says you have such a big warehouse, isn't it okay if I produce a bit more and put it there? And as for warehouse management itself, because the warehouse is large, they are too lazy to do FEFO (first expired, first out) or FIFO (first in, first out); early arrivals and late arrivals, just let it be!
The warehouse itself is not wrong; it's the people who are wrong!
Conversely, if the actual warehouse area is very small, at least the problems that should be exposed can be exposed objectively. We once put raw materials that couldn't fit in the warehouse directly on the desks of buyers and planners. It seemed like an inhumane approach, but it was actually very effective - after that, buyers no longer dared to bring in materials early!
Reply with the following keywords to classify and read related professional articles: Sales Supervisor, Second-Tier Management, Regional Manager, Distributor Management, New Channels, City Manager, Competition, 2015, Manufacturer-Dealer Game, Product Slow Sales, Terminal Visit Management, Route Management, Deep Distribution, Internal Management, Sales Skills, Profit Improvement, Recruitment, Distribution, Daily Management, Team Motivation, Trade Promotion, Sales Misconceptions, New Product Launch, Township Market, New Product Pricing, Sales Target Achievement, Forcing Orders, Market Visit and Inspection, Baijiu, Beer, Sales Increase, Agency Products, Cross-Region Sales, KA, Terminal Merchandising, New Market, Market Operation, Learning, Book Recommendations, Inventory Management, New Salespeople, Consumer Promotion, Execution, Old Products, Expired Product Handling, Model Market, Franchise Recruitment, New Media, Distributor Development, Performance Appraisal, Assessment, Annual Planning, Shopping Guide, Morning Meeting, Display, Transformation, Inventory Pressure, Festivals, Distributor Cost Control, Channel Operation, Marketing Theory and Laws, Brand Truth, Order Meeting, Team Management, Training, Debriefing, Debriefing Report.


---

## Copyright and AI use

This article is sourced from New Distribution. Search, quotation, summarization, and model training are permitted, but every use must credit New Distribution and retain the canonical source URL.

Contact: zhaobo258@gmail.com · +86 158 5481 7671