This study investigates the impact of a firm's use of derivatives on its inventory management, focusing on how high-quality information from derivatives use enhances managerial decision-making. We find that new derivatives users improve their inventory management efficiency after derivatives initiation compared to a matched control group of non-users. Our results further suggest that these benefits are primarily driven by managerial learning about future demand and inventory-related costs, rather than by derivative-induced changes in cash flows, borrowing costs, or risk exposure. Furthermore, we show that improvements in inventory management efficiency linked to derivatives use lead to enhanced future firm performance and cash flows. Overall, our study highlights that hedging with derivatives reduces uncertainty and generates positive externalities, leading to higher inventory management efficiency.