Managing Inventory Effectively

This is an intensive course for those who want to understand and implement the essential tools for managing inventory in the supply chain.

Participants are shown how to evaluate procedures and make needed changes to methods to improve customer service whilst achieving reductions in inventory eliminate wasteful costs; avoid internal problems that limit performance; obtain added value for money.

Course Objectives

At the end of the course participants will be able to:

• Understand the use of inventory throughout the supply chain.
• Develop inventory strategies to support business strategies.
• Analyze tradeoffs between inventory costs and customer service levels.
• Determine how to measure and improve inventory performance.
• Understand and manage variability that impacts inventory.
• Evaluate how to tradeoff transportation and inventory costs.
• Determine how to optimize inventory levels to meet service requirements.
• Understand the basics of inventory and forecasting technology.

Course Outline

Session 1 - The Supply Chain

The Supply chain definitions, history and key aspects

• Definitions
• History and development
• Key aspects
• Befits of supply chain approach

Relationships and material flows in the chain

• Integrating the supply chain
• Lead-times
• Customer service
• Adding value
• Tradeoffs
• Power of information
• Sharing and collaboration in the supply chain

Session 2 - Products & Stock

Product Classification

• Supply /demand variables
• Dependant and independent demand
• Patterns of demand
• ABC Analysis or the 80/20 rule
• Product coding

Inventory costs and service

• Why hold stock?
• Inventory costs
• Service levels from inventory
• Cost/service trade offs
• Understanding Lead time
• Lead time variability and uncertainty
• Inventory and statistics

Session 3 - Replenishment Methods

How much stock should be held?

• Stock time curve
• Determining the Reorder level
• Determining the Reorder point
• Carrying safety stock
• Fixed and variable time periods
• Fixed and variable order quantities

Replenishment methods for independent demand

• When to order
• How much to order
• Economic order quantities
• Two bin methods
• Minimum - maximum methods
• Comparing continuous review and periodic review methods

Other Replenishment methods

• When to order for dependant demand
• How much to order for dependant demand
• Materials planning (MRP and MRPII)
• For spare parts

Session 4 - Forecasting & Stock Control

Demand Forecasting

• Sales forecasts
• Statistical forecasts
• When forecasting is easier
• When forecasting is harder
• Stock coding

The method by which stock is coded is important in the overall management process, this session will examine:

• Different methods
• Understanding of all involved
• Checklists to help on deciding the best option
• Stock Recording

This session looks at stock recording, a critical aspect of stock control and if done incorrectly is the source of many subsequent errors

• Separation of powers
• Legal issues
• How do we get inaccuracies?

Stock Checking

Much time can be spent on this activity, but there are methods to both minimize the time and at the same time increase checking accuracy. This session examines such aspects

• Roles and Responsibility
• Requirements
• Job Descriptions
• Authority levels
• Tolerances and approvals
• The programme
• Options
• Reconciliation’s /discrepancies

Session 5 - Improvements

Model for planning inventory

• Managing inventory by value and by volume
• Questions to ask about inventory
• Model for inventory planning
• What To Implement Now

## Course Methodology

A variety of methodologies will be used during the course that includes:

• (30%) Based on Case Studies
• (30%) Techniques
• (30%) Role Play
• (10%) Concepts
• Pre-test and Post-test
• Variety of Learning Methods
• Lectures
• Case Studies and Self Questionaires
• Group Work
• Discussion
• Presentation