That gap, almost twice the long-run norm, does not appear overnight and it does not self-correct. Each week of operational drift adds to a cost base that compounds quietly until it surfaces in a margin review.
The instinct under demand uncertainty is to hold more. That instinct is understandable and, in some cases, correct. Strategic buffer against a genuine supply disruption earns its cost. What does not earn its cost is stock accumulated through inertia: slow-moving lines, duplicated safety stock across sites or inventory that was right for a demand forecast made three months ago. The August LMI data suggests many operators are carrying the second type while paying the price of the first.
The operational question is not whether to hold buffer but whether you can tell the difference between the two categories in real time. Inventory cost signals are available now; acting on them requires visibility that connects stock positions to carrying costs at the SKU and site level, not just in aggregate.
Operators who build that distinction into their planning cycle will contain the compounding effect. Those who wait for a quarterly review will pay for the delay.
