Inventory Management, Forecasting, and Demand Planning

Inventory Management, Forecasting, and Demand Planning

Methodology:

• Interactive training techniques, hands-on exercises, and summarized presentations.
• Individual and group exercises related to the work.

Course Objectives:

Participants will be able to:

• Identify inventory management goals and their impact on cost and customer service.
• Set up appropriate inventory classification and use best practices for material specifications and indexing.
• Use forecasting techniques to predict demand and improve supply lead time management.
• Calculate optimal order quantities and determine inventory and reorder point.
• Schedule periodic counting and improve inventory record accuracy, finding ways to reduce inventory.
• Identify different techniques for inventory reduction, including Just-in-Time (JIT) production.
• Define relevant Key Performance Indicators (KPIs) to measure and improve inventory performance.

Target Audience:

• Inventory managers and planners at executive and supervisory levels.
• Anyone working in material management roles such as purchasing, warehousing, distribution, who needs to understand inventory planning and control mechanisms.

Program Content:

• Introduction to Inventory Management.
• Objectives of inventory planning and control.
• Reasons for holding inventory.
• Inventory information system considerations.
• Push vs. pull system.
• Determining inventory costs.
• Customer service in inventory management.

Inventory Description and Classification:

• Types of inventory.
• Inventory classification using ABC method and classification model.
• Uses of ABC classification.
• Material specifications and indexing.
• Demand forecasting and lead time management.
• Inventory order cycle.
• Independent demand vs. dependent demand.
• Factors influencing demand.
• Factors affecting demand forecast accuracy.
• Demand patterns.
• Methods for predicting demand quantities:
  • Seasonal demand.
  • Moving average.
  • Exponential smoothing.
  • Measurement of forecast accuracy.
• Determining lead time and control methods.

Inventory Systems:

• Inventory holding costs and ordering costs.
• Economic Order Quantity (EOQ) model.
• Dealing with quantity discounts.
• Objectives of sound inventory.
• Determining appropriate inventory.
• Determining the reorder point (ROP).

Inventory Counting and Control:

• Importance of accurate inventory records.
• Storage functions.
• Reasons for inventory record inaccuracy.
• Requirements for accurate inventory records.
• Reporting inventory accuracy.
• Periodic and perpetual counting.

Reducing Inventory Investment:

• Importance of Just-in-Time (JIT) theory or pull system in reducing total costs.
• Identifying surplus.
• Options for disposing of excess inventory.
• JIT methods.
• JIT requirements.
• Risks of JIT.

Measuring Inventory Management Performance:

• Importance of tracking the effectiveness of inventory planning and control functions.
• Underlying reasons for poor performance in inventory management.
• Setting key performance indicators and inventory objectives.
• Examples of key performance indicators used in inventory planning and control functions.

Characteristics of an Inventory Specialist.