Supply Chain Management

What Is an Inventory Analyst?

What Is an Inventory Analyst?
As far as the balance books are concerned, having too much inventory is just as bad as having too little. Image from Pexels
Christa Terry profile
Christa Terry August 26, 2020

These unsung heroes of the supply chain world play an important role in keeping businesses in the black. The job provides a good entry-point for an SCM career.

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Inventory is a valuable asset in retail and e-commerce, food services and distribution, manufacturing, and capital projects. However, if inventory doesn’t turn over quickly enough, it becomes a liability.

As far as the balance books are concerned, having too much inventory is just as bad as having too little. Consumer goods need to be warehoused; older unsold stock may need to be unloaded at a loss or destroyed. Food spoilage costs billions of dollars each year. Excess inventory reduces available cash flow and leads to decreased flexibility because businesses can’t update or expand product lines when they’re sitting on unsold stock.

That’s what makes inventory control a critical part of operations for businesses large and small. Knowing how much to produce or purchase is just one piece of the puzzle. Managing inventory also involves making complex decisions about timing, tracking, pricing, and storage.

Inventory analysts (also called inventory control analysts) are the supply chain management (SCM) professionals who make those decisions. At smaller companies, they may keep track of stock manually using spreadsheets and visual checks of stock. Inventory analysts at large corporations are more likely to use enterprise resource planning (ERP) software or custom inventory-control applications.

Inventory analyst is an entry-level supply chain role with responsibilities and duties that can vary significantly from company to company. Some inventory analysts ensure there is enough stock on hand to meet demand. Others handle forecasting, pricing, procurement, and distribution.

In this article, we dig into the question What is an inventory analyst? and cover the following:

  • What are inventory analysts responsible for?
  • What do inventory analysts actually do?
  • How does one become an inventory analyst?
  • What qualities and skills do inventory analysts need?
  • How much are inventory analysts paid?
  • Are there any skills that tend to increase salaries in this role?
  • Can inventory analysts advance into more senior positions?

What are inventory analysts responsible for?

Inventory analysts work on the purchasing and procurement side of SCM, providing an accurate picture of available inventory and pending stock needs. It’s not as easy as counting goods and looking through past orders to spot trends. Inventory analysts must track multiple elements—slow and non-moving inventory, weaknesses in current inventory procedures, inventory balances, and inventory turnover ratios (ITRs). The overall goal of inventory control is to increase the ITR through checks on excess procurement and careful analysis of inventory procedures.

Why is this important? Consider an anecdote Elon Musk shared in a fireside chat with Salman Khan (as relayed by Remi Al in a piece for Medium): “One of Tesla’s suppliers had, for a myriad of painfully erroneous reasons, failed to deliver USB cables. This simple $3 item brought the entire Tesla production line to a standstill as the team literally drove to every electronic store in the Bay Area to try to obtain USB cables for the car’s computer system.”

Collaboration figures into nearly every aspect of the job. Inventory analysts work closely with leadership to ensure that stock is sufficient to meet a company’s strategic goals. An astute inventory analyst would have noticed that Elon Musk’s USB cables weren’t in the warehouse before they were needed and alerted management. They also work with the salespeople to anticipate buyer demand and procurement specialists responsible for ordering raw materials or products. Other collaborators in inventory control include project managers, warehouse employees, and shipping supervisors.

What do inventory analysts actually do?

Inventory control strategies differ from industry to industry, so job descriptions for this role may vary. An inventory analyst working in fast fashion has to make extremely accurate judgments about how well particular items will sell because excess inventory is usually sold at a loss, and they have to do it quickly because demand in fast fashion is time-sensitive. Inventory analysts at natural gas companies don’t have to deal with consumers’ fickle desires and can store product without worrying that it will go out of style. However, they do have to worry about the impact of large-scale storage on pricing across the industry. In both cases, the inventory analyst has to help their company buy (or store) just enough stock to satisfy demand.

An inventory analyst’s daily duties may involve:

  • Analyzing purchasing data
  • Creating smooth product flows
  • Determining asset valuations
  • Developing process improvements
  • Developing strategies to avoid low stock and overstock
  • Directing stockroom workers
  • Maintaining seasonal and promotional stock levels
  • Managing inventory databases
  • Meeting with management
  • Minimizing inventory risk
  • Monitoring open purchase orders
  • Overseeing annual audits
  • Performing cycle counts
  • Reporting product issues to merchandising
  • Resolving inventory issues through adjustments and transfers
  • Tracking inventory levels to optimize inventory turns
  • Writing inventory reports

How does one become an inventory analyst?

There isn’t a single degree pathway designed specifically for inventory professionals. Most people in inventory analyst jobs have four-year bachelor’s degrees in subjects like operations management, supply chain management, engineering, and business administration or related fields. Those who work in industries with specific field-driven inventory control needs may instead have majored in subjects related to the company’s niche. Experience in retail environments, warehousing, or purchasing is an asset when you’re applying for inventory analyst positions. If you have sufficient inventory management experience, you might not even need a college degree.

According to, a whopping 25 percent of experienced inventory analysts have high school diplomas only. However, most have bachelor’s degrees, and inventory analysts who’ve graduated from an undergraduate program tend to earn more than their colleagues with high school diplomas and associate’s degrees. Some inventory analysts have master’s degrees, but most employers don’t expect people working in this role to have attended graduate school.

What qualities and skills do inventory analysts need?

Inventory analysts handle a broad range of tasks and collaborate with people at different levels of seniority. They need to be highly adaptable and have solid communication skills. Decision-making is a big part of this job; inventory control analysts must be comfortable making those decisions autonomously. Other skills and qualities that inventory analysts typically possess include:

Strong quantitative thinking and data analysis skills

Inventory management is increasingly data-driven. Smart inventory control analysts use data analytics to estimate sales, build inventory, develop replenishment strategies, plan inventory disposition, and spot emerging inventory issues. Experience with information management and database creation is a big plus, but even bachelor’s-level statistics and mathematics can be valuable.

Tech savvy

Inventory analysts use a range of software applications, including spreadsheet apps like Excel, databases, and sales management systems. They may also be required to use custom inventory management (ERP) software designed to not only track inventory but also forecast demand, sales, and overstock. Inventory analysts should be comfortable using hardware like wireless barcode scanners and computers built into pallet jacks and forklifts (often connected directly into software suites). At companies that can afford to adopt the latest technologies, inventory analysts may work with artificial intelligence systems.

A knack for predicting the future

Inventory analysts don’t just look at what’s on the warehouse shelves. They also look for what’s missing from those shelves and what should be added next year. They have to think strategically and understand how existing inventory and future stock levels will impact a company’s ability to meet its revenue goals.

How much are inventory analysts paid?

You may have heard that there are big bucks to be had in supply chain management careers, and there are—but not in this particular job title. Full-time inventory analysts are paid pretty well, but it isn’t one of the best-paying SCM jobs. According to PayScale, the average inventory analyst salary is about $55,000 and the best-paid inventory analysts earn around $71,000; that’s where salaries top out. To earn more than that in inventory management requires advancing into a higher-level position (more on this below) or moving laterally into related jobs that pay more.

Are there any skills that tend to increase salaries in this role?

PayScale reports that some skillsincrease salaries in inventory control roles. These include:

  • Data analytics skills
  • Financial analysis skills
  • Forecasting skills
  • Inventory management skills
  • Problem-solving skills
  • SAP ERP skills
  • Supply chain management skills

You may also be able to maximize your earning potential by earning specialty certifications. You can’t go wrong with supply chain management certifications, operations management certifications, and procurement credentials like the Certified Purchasing Professional (CPP) designation, but if you can only pursue one certification, go for the Certified in Production and Inventory Management (CPIM) credential offered by the Association for Supply Chain Management.

Can inventory analysts advance into more senior positions?

Yes, and this is probably the best way to increase your earning potential. Senior inventory analysts earn about $71,000; senior inventory managers and demand planners may earn as much or more. Senior inventory planners earn around $90,000, as do inventory planning managers. You’ll get the biggest income boost by leveraging your experience in inventory management to transition into other SCM roles. You might need to go back to school for a master’s degree and/or get additional training, but you could eventually become a:

At the end of the day, this isn’t the sexiest supply chain management job. “It’s a job where boring is best,” writes Remi Al in the Medium piece linked above. “[A job] where every need of the business is anticipated, where many urgent calls are crisis calls of someone else’s making, yet where the inventory team needs to find a solution. All done while simultaneously not sinking all the company’s cash into non-moving stock.” Inventory analysts take on a lot of responsibility and don’t get a lot of accolades, but applause isn’t nearly as valuable as advancement opportunities—and this role can definitely lead to bigger and better things.

(Last Updated on February 26, 2024)

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About the Editor

Tom Meltzer spent over 20 years writing and teaching for The Princeton Review, where he was lead author of the company's popular guide to colleges, before joining Noodle.

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Categorized as: Supply Chain ManagementBusiness & Management