Inventory Reduction Strategies

Introduction

The relation between Principles of Inventory Management and a firm’s Risk Pooling Strategy.

The importance and scope of the Concept of Inventory Flow in a firm’s supply chain strategy.

The identification of effective Inventory Reduction Practices in a firm’s inventory level strategy.

Course Objectives

• Explaining the Material Flow Process and related transformation factors.
• Understanding the principles of Inventory Cost Structures and related selective control measures.
• Executing the Integration of Inventory Positioning and the network designing model.

Course Outline

• Focusing inventory level as a function of time. Understanding raw-material inventory, work-in-process inventory, finished-product inventory, single- stage inventory, initial-stage inventory and centralized-decentralized inventory.
• Conceptualizing the risk pooling principle on demand variability. The critical points of safety stock and average inventory. The behaviourial aspects of aggregating demand across products and across time.
• Inventory flow as an idle resource of any kind having an economic value. Inventory in a stock of material facilitating production or satisfying customer demands.

• Primary purpose of inventory of uncoupling the various phases of operations. Within the uncoupling processes giving rise to the critical level of carrying inventory.
• The scope of inventory cost conceptuals in item cost, ordering cost, carrying cost and stockout cost. The components of cost of capital, cost of storage, costs of obsolescence and lost
• The seven inventory reduction strategies of performing periodic review, management of usage rates, focusing lead-time reduction, enhancing cycle counts, shifting of inventory ownership, adherence of quantitative approach and application of the ABC Analysis.

Methodology

Lecturing and slide presentation, group assignment and interaction, case appreciation and emulation.