Why volatility freezes cash
Commodity grades are made to stock, specialties to order. Buying ahead to hedge feedstock cost can swell inventory that never converts, so the same price swing that protects margin can trap the cash that funds it.
Size the buffer per grade
The cash conversion cycle, days inventory plus days sales minus days payables, shows the trap forming as inventory days climb. Inventory turns per grade tell you where buffers are too fat. Limits under ECHA REACH also gate which grades can be made and stored.
Where the ERP closes the loop
On Hudace, inventory, demand, and procurement share one platform, so the make-to-stock and make-to-order line is set per grade on real variability rather than a uniform buffer. Xenon AI runs demand sensing and stress tests, a feedstock shock, an energy spike, and recommends reorder points.
Planners approve the plan and procurement places the buys. AI advises; people commit the capital.
The numbers to watch
Watch cash and service together; one should not buy the other.
Cash conversion cycle
Days inventory + days sales - days payables. Rising is the trap forming.
Inventory turns by grade
COGS / average inventory, per grade. Shows where buffers are oversized.
Days inventory outstanding
How long stock sits before sale. The early warning during a buying spree.
Service level
Orders met from stock on make-to-stock grades. The level the buffer protects.
See working-capital control on Hudace
Talk to our team about sizing buffers per grade on real demand.