Strategic Inventory Management

Inventory management tracks inventory from its point of manufacture through intermediary facilities such as warehouses to its point of sale. Strategic inventory management can improve profitability, reduce waste, and enhance customer satisfaction.

This course provides the basics of managing inventory, controlling stock, and using demand forecasts to guide inventory levels. You will learn best practices and methods to monitor and oversee demands and supplies effectively. In addition, you will explore practical methods to reduce inventory levels and how to use material requirements planning as an alternative to forecasting. 

Section 1: Overview of Inventory Management and Control
 

• Examine the role of inventory management in supply chains.
• Describe the objectives of inventory control.
• Explore inventory classification and the role of the Pareto Law in inventory control techniques.
• Discuss using Economic Order Quantity (EOQ) to manage inventory order levels.
• Outline procedures to eliminate obsolete inventory.
• Identify reasons for current stock levels.
• Review how optimising your inventory management processes is tied to potential profits and losses.

Section 2: The Role of Customer Service on Inventory Levels
 

• Discuss customer requirements and their impact on inventory.
• Identify ways to measure availability.
• Outline demand management.
• Describe how inventory management influences customer satisfaction.

Section 3: Demand Planning
 

• Review the fundamentals of demand planning.
• Explore the benefits of customer segmentation on inventory control.
• Describe Aggregate Planning and Master Scheduling strategies.
• Examine maintenance inventory management (MRO) and how it affects inventory planning.

Section 4: Managing and Tracking Inventory
 

• Use Pareto analysis to control inventory.
• Understand inventory/stock cover and its impact on inventory levels.
• Discuss practical approaches to reducing stock.
• Analyse strategies to record inventory levels: period stock takes, cycle counting, and perpetual recording.
• Compare the use of barcodes and RFIDs in recording inventory movement.
• Review the basics of inventory accounting and inventory valuation.
• Discuss the role of stock control in an organisation.

Section 5: Methods to Measure Performance
 

• Calculate stock turnover rate.
• Measure customer service.
• Examine the cost of operations.
• Discuss how to measure the effectiveness of your system.
• Describe how selective inventory management affects costs in inventory control.

Section 6: Safety Stock
 

• Assess historical safety stock levels.
• Identify normal demand patterns.
• Review and analyse target stock levels.
• Examine ways to manage lead times.

Section 7: Just-In-Time Inventory Management
 

• Summarise the Just-In-Time (JIT) management method and environment.
• Describe the benefits of using JIT.
• Explore JIT stock control and its impacts on warehousing, costs, and waste.

Section 8: Supply Practices
 

• Discuss supplier partnerships and their role in inventory management.
• Outline the ordering process and set order quantities.
• Review purchasing processes.

Section 9: Forecasting Strategies
 

• Outline the principles of forecasting.
• Compare quantitative and qualitative forecasting.
• Describe weighted average forecasting.
• Examine the impact of lead time on the forecasting process.
• Understand how to include variations such as seasonal sales in forecasts.
• Use forecasting to set safety stock levels.
• Identify strategies to track and improve forecast accuracy.

Section 10: Material Requirements Planning
 

• Describe how materials requirements planning (MRP) helps to avoid uncertainty.
• Explore how MRP can function as an alternative to forecasting.
• Examine the impact of batch size on MRP performance.
• Discuss future MRP developments in inventory and logistics.