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ICTD International Centre for Training and Development

Statistics for Inventory Control Management

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Description

Many organizations today have mastered the basics of inventory management for production raw materials, but do not realize that inventory control for maintenance supplies and equipment spare parts requires very different procedures and objectives.

Inventory decisions can impact equipment uptime. Poor warehouse controls can derail the best laid plans of the maintenance and engineering function.

## Course Objectives

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

  • Provides a framework for improving ROI and reducing inventory investment
  • Establishes the best methods for inventory analysis and improvement actions
  • Demonstrates the use of spares inventory segmentation for demand planning
  • Highlights the problems found in most spares warehouse environments
  • Reveals the best approach to improve inventory record accuracy
  • Outlines the fundamentals of warehouse organization and management
  • Identifies the correct supporting roles for the purchasing function and suppliers
  • Suggests the key weaknesses of CMMS tools that must be addressed
  • Improves the coordination of inventory management with maintenance management
  • Provides opportunity to practice course concepts and create a personalized plan for action

Course Outline

Day I: 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

Day II: 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

Day III: 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

Day IV: 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

Day V: Improvements - Model for planning inventory

  • Managing inventory by value and by volume
  • Questions to ask about inventory
  • Model for inventory planning
  • Course evaluation and summary

## 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

Who should attend

  • Those new to managing inventory
  • Those non inventory people who need to gain an awareness of the issues and key drivers of stock control operations
  • Inventory, Stock, Supply Chain, Logistics, Warehouse and Distribution Supervisors/Managers
  • Owners, operators and Directors of companies who hold sock and inventory

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