Training on Inventory Management and Optimization Techniques

Module 1: Fundamentals of Inventory Management

• The strategic role of inventory: balancing service, cost, and risk.

• Types of inventory: raw materials, WIP, finished goods, MRO.

• Key metrics: inventory turnover, days of inventory outstanding (DIO), fill rate.

• Case Study/Hands-on Exercise: Calculate inventory turnover and DIO for a company using financial statement data and compare it to industry benchmarks to identify a potential issue.

Module 2: Inventory Segmentation and Policy Setting

• ABC analysis based on annual consumption value.

• XYZ analysis based on demand variability.

• Combining ABC and XYZ (e.g., AX, CY) to define inventory policies.

• Case Study/Hands-on Exercise: Perform an ABC-XYZ analysis on a portfolio of 100 SKUs, and develop differentiated inventory policies (service level, review frequency) for each segment.

Module 3: Demand Forecasting and Safety Stock

• Qualitative and quantitative forecasting methods.

• Calculating safety stock to cover demand and lead time variability.

• Setting service level targets based on business strategy and segment.

• Case Study/Hands-on Exercise: Calculate the optimal safety stock and reorder point for a high-volume SKU (AX) and a slow-moving SKU (CZ) given different lead time and demand variability data.

Module 4: Inventory Control Systems and Cycle Counting

• Fixed-order quantity vs. fixed-time period models.

• The perpetual inventory system and the role of cycle counting.

• Designing and implementing a cycle counting program (e.g., ABC-based counting).

• Case Study/Hands-on Exercise: Design a cycle counting schedule for a warehouse with 10,000 SKUs, using ABC classes to determine counting frequency and resource requirements.

Module 5: Managing Excess, Obsolete, and Slow-Moving Inventory

• Root causes of E&O: forecasting errors, product lifecycles, MOQs.

• Strategies for prevention: improved S&OP, supplier collaboration.

• Strategies for disposition: liquidation, rework, donation, and write-off.

• Case Study/Hands-on Exercise: Analyze a report of slow-moving inventory, identify SKUs with no demand for 12 months, and develop a detailed disposition plan for each, including financial and operational considerations.