S/N COTENTS

1 Introduction

2 Supply-Chain Management

3 Operational Environments

4 Types of Inventory

5 Inventory Transactions

6 Inventory Record Accuracy

7 Cycle Counting and Physical

Inventory

8 Inventory Planning and

Replenishment.

9 Storage and Physical Control

10 Lean Principles and Continuous

Improvement.
 Inventory Management
LEARNING OBJECTIVE :
- What you would be after completing your Current Education
- Manager’s Role - get the things done by right decisions , using right resources
- Resources in a business – Factor of Production
- Functional Manager - Functions / Department
- How do you come to university? System = Input – Process – Output/result/solution
- So if you want to change the result, look for input and process to have a best fit
solution/output. (think END before you START)
- To understand System – create relations among different parameters
- Skills of creating relation – with sound knowledge – theoretical or practical approaches
or observation
- Research – knowing again- Scientific/Systematic way –Absolute(independent) and Non
Absolute or Relative (dependent) studies- Social Sciences (Economics, SCM, HRM,
Marketing…)
- Inventory 4 types
- Collection of Data and Information for different Input, Processes and Output
parameters
- Establish relationship among various factors/parameters of system (direct or indirect,
strong or weak relation) and how they are impacting the desired output (favorable or
Unfavorable) – Develop KPI metrics for performance evaluation
- Management Process : Plan- Organize – Implement - Control
Inventory means a physical stock of goods kept in store to meet the anticipated demand
The eternal issues of inventory management are
- how much to keep on hand, and
- how much and when to order.
- This Course is intended as a plain-language explanation of the basic principles of
inventory management.
- The concepts behind the approaches and techniques are explained in detail and many
real world examples are provided.
- We recognize that there is no one approach or technique that is applicable, either to
all firms or to all inventory in a firm. We illustrate this point by presenting various
operational environments and describe what techniques would be suitable. Although
this is a book on inventory management, we acknowledge that inventory management
is not the most important element in the management of a firm. To state otherwise
would be contrary to the systems viewpoint, which holds that all systems have
components that support each other in the attainment of a goal. Inventory
management is but one important element in the overall management of a firm.
Throughout all chapters, we point out the interrelationship between inventory
management and the other functions in the company. Different types of operations
demand different approaches to inventory management. Inventory management in a
machine shop that produces product per customer specifications is different from that
of a flour mill. Inventory management approaches and techniques for these different
environments require different combinations of approaches and techniques. The
differences between operational environments and their impact on inventory are
discussed
Inventory Management
Inventory as a critical link in supply chain management.

Learning objectives is to establish a baseline for a working knowledge of the topics

that follow
- SCOR Model – Supply Chain Operations Reference Model for A Single Company and
Flows of Supply Chain
- SCOR Model : referring Integration with Supplier’s & Buyer’s Organization
- SCM TO GLOBAL SUPPLY CHAIN- GLOBAL BUYING (IMPORT) AND GLOBAL SELLING
(EXPORT) -
- Supply Chain – The NET WORK of INTERRELATED COMPANIES & their ROLES/STAGES
- Inventory - IN BIG PICTURE of INTEGRATED SUPPLY CHAIN
- Inventory plays a very critical role in attributes for a good Supply system.
- Supply Chain and Product
- Different Supply Chain and its collaboration with Other Supply Chains
Chapter 9 : Inventory in Supply Chain Management

Supply chain Management

The System Viewpoint
The Firms Place in the Supply Chain
Coordination with other elements in the Supply Chain
Opportunities for Improvement Are All over the Supply Chain
An Example of a Supply Chain Opportunities
PRODUCT and relation with SUPPLY CHAIN
PRODUCT

More COMM More SERVICE

COMMODITY COMM=SERVC SERVICE
Less SERVC Less COMM
AUTO PARTS AC & AS SRVC HOTELS AIR LINES DR., TEACHER

Supply Chain : Network of inter-related companies

Production : Process of making Product
There are 2 categories of Production
1 - Manufacturing : where Product is made as Commodity
like (manufacturing of Marble), (Global Trading, Warehousing and Retailing of Auto
Parts, Cotton), (publishing magazines)
And this Supply Chain is called a Commodity Supply Chain
and
2- Operations : where Product is made as Service
like (operation) for (IT Institute, Software House, Courier, Freight Forwarding &
Logistics Companies, Shipping Line, Insurance Company and Customs Clearing),
And this Supply Chain is called a Services Supply Chain
The SCOR Model for A Single Company and
FLOWS of SCM

Plan Source Make Deliver Return

SCOR was developed in 1996 by the management consulting firm PRTM and endorsed
by the Supply-Chain Council (SCC)
The main elements which flows between different Functional Departments of an
Organization

1. Materials [Purchase, Logistics & Operation -Product based ]

2. Funds [Finance - Funds based ] Internal SC

Management
3. Information [Sales, Pricing & CSD - information Based (CRM)]

ERP- Enterprise Resource Planning is the tool to integrate all functional activity
INFORMATION of the business. Giving Technology Enabled visibility. Bringing Supply
Chain Excellence
SCOR MODEL DEFINING MANAGEMENT
PROCESSES OR FUNCTIONS
 Business Operation in Economy : LOCAL SUPPLY CHAIN TO GLOBAL SUPPLY CHAIN
PLAN

OF MANAGEMENT

SOURCE MAKE DELIVER

OF RAW MATERIAL A PRODUCT VIA DISTRIBUTOR, RETAILER
COMMDITY-COMM/SER-COMM=SER-SER/COMM-
OR DIRECT
SERVICE

RETURN TO RETURNS FROM

DEALS WITH SC PARTNERS SUPPLIERS INTERNAL STAFF CUSTOMERS

DEPARTMENT PROCUREMENT PRODUCTION MARKETING

BUYING/PURCHASE MANUFACTURING / OPERATIONS SALES
FUNCTION OF
TRADE TYPE LOCAL PURCHASE LOCAL SALES

INTERNATIONAL
GLOBAL SUPPLY CHAIN INTERNATIONAL SALES- EPXORT
PURCHASE - IMPORT

PAYMENTS TO
RECEIVINGS FROM CUSTOMERS
FUNDS SUPPLIERS
BALANCE OF TRADE IMPORTS = EXPORT
'-VE BOT -TRADE DEFICIT- A/PAYABLES FOR
A/RECEIVABLE FROM EXPORT
UNFAVORABLE IMPORT
'+VE BOT -TRADE SURPLUS- A/PAYABLES FOR
A/RECEIVABLE FROM EXPORT
FAVORABLE IMPORT
EXCHANGE RATE
TRADE AGREEMENTS
DUTY AND TAXES
Focus of this chapter is upon the individual firm’s Inventory system but
also recognizing that no logistics system operates in a vacuum.

.
Inventory is a critical link in the overall supply chain – as Glue

Suppliers Manufacturers Warehouses & Customers

Distribution Centers

Transportation Transportation
Costs Costs
Material Costs Transportation
Manufacturing Costs Inventory Costs Costs
Business Inventory : As the glue which holds the supply chain together to allow the
member organizations to operate efficiently and effectively as a system.
What Is Supply Chain Management (SCM)?
A set of approaches used to efficiently integrate the

Suppliers
Manufacturers
Distribution centers/ Warehouses “facilities or
retail outlets Location

So that the product is produced and distributed

In the right quantities
To the right locations
And at the right time
System-wide costs are minimized and
Service level requirements are satisfied
And Organizational OBJECTIVE (High Profits) are Achieved
Transportation plays a very critical role in these attributes for a
good system.