UK manufacturers holding overstocked goods worth £102k


UK manufacturers are dangerously overstocked, carrying an average £102k in additional product, according to new research.

The Cash Flow and Overstock report, by inventory management software provider Unleashed, analysed 381,000 products, ingredients and components stocked by over 1,800 firms across the UK, North America, Australia & New Zealand.

Jarrod Adam, Head of Product at Unleashed, said: “Firms last year were forced to stockpile in response to supply chain shocks. But that's had serious cash flow impacts. Now the challenge for many is freeing up cash flow as economic conditions tighten – and the good news is the money is there, when you look closely at the numbers.” 

The £102,000 figure from the report represents an average ‘overstock position’ for all UK manufacturers – the difference in value between optimum stock levels for each product, versus the actual value of stock held*. 

The breakdown of figures for each industry were as follows:


Average capital held in overstock (GBP)

Sport, Entertainment, Recreation


Electrical and Electronic Components


Furniture, Fixtures, Home Furnishing


Health, Medical Supplies and Equipment


IT Products and Services


Industrial Machinery, Raw Material and Equipment 


Energy, Chemicals


Electronics, Telecommunication


Clothing, Footwear, Accessories


Personal Care




Beverages (alcoholic and non-alcoholic)


"It's a genuinely eye-opening number,” says Adam. “What we’re seeing here, really, is the cost of caution: a value in pounds that shows where firms are, against where they could be – while still doing business at the same levels.” 

The figures will be good news for many UK businesses, especially those looking to improve the health of balance sheets ahead of the new financial year. However, industry experts are cautioning that the savings won’t apply to all.

Commenting on the figures, Phil Oakley, MD of systems integration specialists Outserve, said: “I think it will vary, from business to business, and those with quicker stock turnover will realise the cash quicker. So they could make small changes to their purchasing cycle where they're only a month or two ahead of themselves, giving themselves a bit of a breather to get their stock at the right limits rather than over-stocking. Having that right limit just allows them to slow down their purchasing. So, within a month or two they could see that cash staying in their bank account rather than going out.  

“If you're on a longer cycle and you've got more in stock, then it’s going to take a bit longer for you to benefit. But there may be other benefits that you can look at, like selling some of the items that you're overstocking, even if it's not quite the margin you'd like, it's getting cash back into the business. It's freeing up warehouse space.  

“Different businesses will have to see where they can adapt and where the benefits are. But I really do think for so many businesses there is ‘cash on the table’ that they could either keep in the bank or put to use.”

Circle One, UK surf brand and Unleashed customer, agrees with the findings, with its Business Director, James Trevelyan, forced to order blind amongst last year’s supply chain chaos.

"In terms of the overstocks, by the end of last year we were probably four times over what we'd expect our inventory to be at that point. 

“This time around we were forced to order early. The factories in China were saying five or six months before, you need to order now, otherwise you're not gonna get your slot. Now usually we'd have all the data on the table. I would get quite granular and then add on a bit more to the forecast of uplifting sales etc. It's not really an agile lead time. You can't go back and change this quantity so we had to draw a line in the sand in September.

“It does mean we are not getting twitchy about a late shipment or that we are going to miss the pre Easter period.  We don't have that worry, but a lot of our cash is tied up in that stock. However, we were fortunate in that Covid dealt our sector a good hand and that enabled us to boost our cash reserves, and use that cash to invest in more stock.”

Ultimately, Unleashed’s Jarrod Adam believes the findings will make a real difference for product businesses pressured by inflation and supply chain shocks. Everyone who needs to hold inventory has had a tough few years, he says – and most of it’s been out of their hands. 

“It's all about finding ways to control the controllables,” says Adam. “That can mean anything from improving internal efficiencies, to using a more granular, data-based approach to rebuying.” 

The latter point is something he’s committed to deliver to his customers, by turning their business data into practical tools. 

“We know that unlocking cash flow is a priority for our customers ahead of this new financial year” says Adam. “As a software company, it’s on us to help them do that.” 


The ideal stock levels used in this report levels were found using industry-standard formulas that examine the rate of sale against delivery lead times. All data points were  unique to the different  product lines analysed, meaning the values generated were accurate for each company’s different circumstances. 

  • The figures showing cash flow potential held in overstock in this report were generated by comparing an ‘optimal’ stock position vs the actual stock held by 1,886 firms In the UK, New Zealand, Australia, the US and Canada.
  • Optimal stock positions were calculated individually for 381,000 different product and component lines (SKUs)
  • For each SKU we calculated a minimum and maximum stock level based on rate of sale (or use) and lead time from suppliers. Minimum stock levels were set to actual average lead time, plus seven days. Maximum stock levels were based on this minimum stock level, plus 28 days. 
  • All figures were calculated based on the last 12 months of actual lead time and rate of sale (or use) data.
  • Firms in the study were all manufacturers, manufacturer wholesalers or manufacturer retailers of under USD$25 million in turnover
  • It should be noted that reasons for holding overstock vary from firm to firm, and individual circumstances will always determine if companies can release the cash flow held within overstock.

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