Inventory Optimization for Supply Chain Planning

Inventory Optimization, Supply Planning :

Inventory Optimization for Supply Chain Planning Hands-On Workshop

This program has been developed to communicate industry best practices in the area of inventory management to Supply Chain professionals.

It aims to provide the necessary technical background to enable attendees to develop & implement best practices & procedures in materials management into their own business units. It will holistically present the best practices and explain the concepts and calculations for optimizing your inventory parameters.

We preach true inventory optimization - help you to establish the right parameters your process and systems may need to run a lean machine with just optimal inventories to deliver the service and fill rates.
This is a hands-on, practical workshop with many exercises and case studies and excel-based work out problems. Every planner and material manager will leave the training hall with a diverse skill set to do their day to day jobs.

Download the Workshop Brochure Here!

Who Should Attend?

  • Production Planners
  • Supply Chain Analysts
  • Director of Supply Chain
  • Director of Value Chain
  • Analysts in the Supply Chain
  • Inventory Planners
  • Operations Planners
  • Financial Analysts
  • Director of Logistics
  • Director of Customer Service

 Insightful information on...

  • Purpose of Inventory – Introduction to  Inventory Management Principles  
  • Toolkit for Materials Management
  • Principles of Inventory Management
  • Inventory Optimization
  • Manage by Exception
  • ABC Classification for Inventory
  • Work-site Inventory Management  
  • Techniques Including Kanban
  • Multi-echelon distribution
  • Measurement and KPIs for Inventory  Management
  • Forecast Accuracy
  • Min-Max Models

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Detailed Outline of the Workshop:


SCM Process - Overview of Demand/Supply planning 

  •  Overview of Demand/supply and MPS Process
  • Production Strategies
  • Key objectives of supply chain management – Customer demand fulfillment
  • S&OP as the key driver of monthly planning process
  • Inventory impact on functional Stakeholders
  • Why Forecast and Plan?
  • The Service – Cost – Balance Model
  • Introduction to Demand Planning- What, Why and How?

 Introduction to Inventory Management Principles – Why carry inventory?

  •  Inventory Categories - Direct materials - Indirect Materials - MRO OEM  - MRO Industrial
  •  Purpose of Inventory - Buffering - Hedging - Decoupling 
  • Inventory Strategies -  Make to Order    -  Make to Stock -  Build to Order/ Mass    customization  Postponement - Engineer to Order

Product Segmentation and ABC analysis –

  • SKU Segmentation for inventory strategies ABC analysis – Classification philosophy Pareto analysis of SKU’s based on dollar usage Item Criticality as a factor of Sales Service and Lead time Frequency of Usage Excess, Obsolete and Slowmoving Alignment with the product lifecycle  
  • Discontinuance and end of life (EOL), as appropriate
  • Process flow for segmenting SKU's using the above  techniques   - Example using a three-dimensional matrix;     ABC / Volume / Critical / Status: excess, obsolete        Impact of Segmentation on Cycle Counting and Inventory accuracy

Measurement and KPIs Forecast Error, Customer Service and Inventories.

  • Service Level measurements    - Fill-Rate and On-time Delivery - Order complete      
  • Service Metrics exercise
  • Inventory Performance Measures - Inventory Accuracy - Inventory Turns - Days on Hand
  • Forecast accuracy - MAPE, MAD, MPE, and RMSE  - Calculation exercise
  • Supplier Performance Measures - Schedule Adherence  - Lead Time Adherence
  • Relationship between Schedule Adherence, Customer Service and Inventory Availability 

Digital Supply Chain and its impact on Inventory Management

  • Supply Chain Tower & Improved end to end visibility
  • AI-driven Dashboards for real-time alerts
  • E-commerce and e-inventory management
  • Automation in inventory management
  • Big data to comb through key SCM triggers




Economic Order Quantity and Purchase Quantity Discounts

  • Principles of Inventory management
  • Economic Order Quantity
  • Derivation of the EOQ
  • Determinants of EOQ
  • Ordering Costs versus Carrying Costs
  • Components of Inventory carrying/holding costs – capital, storage, obsolescence, handling (breakdown) and their impact
  • Estimating Inventory Carrying costs for various industries
  • Purchase Quantity Discount

Exercise:  Deciding to take a Purchase Quantity Discount 

Inventory Optimization and Management- Safety Stock

  • Independent Demand Item Reordering
  • Safety Stock calculations
  • Determinants of Safety Stock – Service Level Agreement, Demand Volatility and Lead Time
  • Effect of Demand Uncertainty in Safety Stock – Different Scenarios
  • The perils of variability in Supplier lead time
  • Supplier Lead time Variance
  • Effect of Supplier Uncertainty on Safety Stock Calculations

Exercise: Service percent effect on Safety Stock

Inventory Optimization and Management- Min Max Models

  • Re-order Point
  • Demand During Lead Time
  • Definition of MIN level in the Min-Max Model
  • Definition of MAX level in the Min-Max Models
  • Inventory Cycle and Cycle Time 
  • Cycle Stock
  • Time phased Order Point (TPOP)
  • Lifetime buys and Minimum Buys

Case Exercise: On Safety Stock, Min-Max, and Reorder Point. 

 Work-site Inventory Management Techniques

  • Challenges and Benefits of improving & maintaining inventory Accuracy
  • Periodic review process vs. Perpetual Inventory
  • Cycle counting vs. Physical Inventory
  • Kanban systems
  • Kanban Methodology
  • Determining Container Size and Quantity
  • Safety stock, Min-Max, and DDLT in Kanbans.

Exercise:  Kanban Calculation exercise


Workshop cost includes two days of interactive learning, breakfast lunch and refreshment breaks.  Attendees are responsible for their own accommodation at the Hilton Burlington.

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