It has been our experience that inventory is not typically planned in a rigorous manner. Most inventories are planned against a sales forecast or a planned inventory level. It has also been our experience that the sales forecast is usually wrong, and a planned inventory level is difficult to maintain, due to volatility of demand. The perception of managing thousands of parts yields to a systems approach and a policy approach for controlling those parts. But the uncertainty principles around inventory cause a percentage of the policies to recommend the wrong action, or no action at all at any point in time. Our methodology details a simple approach that deals with these uncertainties, and the impact that uncertainties have on the thousands of parts that make up systems and subsystems. Our methodology reduces the number of variables that must be managed and focuses on managing demand uncertainty and supplier reliability. Demand uncertainty is the variability around what your customer wants, at any point in time, relative to what he ordered, or what you have forecasted. Supplier reliability focuses on the supplier’s ability to deliver on time, at the quality levels expected and the ability to flex with changes in demand. The objective is to create a data base that can be used to calculate these uncertainties and hence the inventory buffers and total inventory for each SKU. When this methodology is fully implemented, an inventory strategy, based on the uncertainty principles, supplier or process lead time, and a customer service level, is in place.