Supply Chain Fundamentals Module 5 - Inventory Management (PowerPoint PPTX Slide Deck)

BENEFITS OF THIS POWERPOINT DOCUMENT

1. Understand all aspects of Inventory Control and Management

INVENTORY MANAGEMENT PPT DESCRIPTION

Planning and managing inventories in a supply chain PPT: Learn inventory management fundamentals, techniques, control systems, and reduction plans. Download the PPT now. Supply Chain Fundamentals Module 5 - Inventory Management is a 69-slide PPT PowerPoint presentation slide deck (PPTX) available for immediate download upon purchase.

Read Marcus Overview

The Supply Chain Fundamentals Series has 5 modules in all as below:
Module 1 – Forecasting – 73 Slides
Module 2 – Aggregate Planning – 28 Slides
Module 3 – Materials Requirement Planning – 36 Slides
Module 4 – Scheduling – 43 Slides
Module 5 – Inventory Management – 69 Slides

The 5th Module on Inventory Management covers the following topics:
Independent versus Dependent Demand
Costs associated with Inventory
Order Quantity Strategies
Determining Order Quantity (EOQ, EPQ and QD)
Inventory Parameters
Order Point
Safety Stock
Lead Time
ABC Analysis
Inventory Management Policies
Cycle Counting
Inventory Record Accuracy
Periodic versus Perpetual Inventory

Buy all the 5 modules as a bundle and receive 25% discount!

This module delves into the intricacies of inventory management, providing a comprehensive overview of the various types of inventories within the supply chain, including raw materials, components, work-in-process, finished goods, distribution inventory, and MRO supplies. It meticulously breaks down the costs associated with inventory, such as item cost, holding costs, ordering cost, and shortage costs, offering a clear understanding of the financial implications of inventory decisions.

The PPT also explores sophisticated methods for determining order quantities, including the Economic Order Quantity (EOQ), Economic Production Quantity (EPQ), and Quantity Discount Model. These models are essential for optimizing order sizes and minimizing total costs, with detailed examples and equations to illustrate their application.

Additionally, the module covers ABC analysis, a critical tool for inventory categorization, helping managers prioritize their focus on the most valuable items. It also includes methods of validation such as FIFO, LIFO, and Weighted Average Cost, providing a robust framework for accurate inventory valuation. This module is a must-have for executives aiming to refine their inventory management strategies and drive operational excellence.

MARCUS OVERVIEW

This synopsis was written by Marcus [?] based on the analysis of the full 69-slide presentation.

Executive Summary
This presentation, "Supply Chain Fundamentals Module 5 - Inventory Management," is designed to equip professionals with essential inventory management strategies and techniques. Developed by a Lean pioneer and certified LSS Master Black Belt, this module provides a comprehensive understanding of inventory types, costs, and management policies. Users will learn to optimize inventory levels, enhance customer service, and minimize costs through effective order quantity strategies and inventory accuracy techniques. Download the PPT to transform your inventory management practices.

Who This Is For and When to Use
•  Supply Chain Managers overseeing inventory operations
•  Operations Executives responsible for cost efficiency
•  Inventory Analysts focused on stock accuracy
•  Procurement Professionals managing supplier relationships

Best-fit moments to use this deck:
•  During training sessions for new supply chain staff
•  In workshops aimed at improving inventory management practices
•  When assessing current inventory strategies for optimization

Learning Objectives
•  Define independent and dependent demand in inventory contexts
•  Analyze costs associated with inventory management
•  Implement order quantity strategies such as EOQ and EPQ
•  Establish effective inventory parameters including reorder points and safety stock
•  Conduct ABC analysis to prioritize inventory management efforts
•  Differentiate between periodic and perpetual inventory systems

Table of Contents
•  Independent versus Dependent Demand (page 3)
•  Costs Associated with Inventory (page 5)
•  Order Quantity Strategies (page 7)
•  Determining Order Quantity (EOQ, EPQ, and QD) (page 9)
•  Inventory Parameters (page 11)
•  ABC Analysis (page 15)
•  Inventory Management Policies (page 18)
•  Cycle Counting (page 20)
•  Inventory Record Accuracy (page 22)
•  Periodic versus Perpetual Inventory (page 25)

Primary Topics Covered
•  Independent Demand - Finished goods or items sold externally, crucial for understanding customer-facing inventory needs.
•  Dependent Demand - Materials or components used in production, essential for managing internal inventory flows.
•  Costs Associated with Inventory - Item, holding, ordering, and shortage costs that impact overall inventory management.
•  Order Quantity Strategies - Various methods like lot-for-lot, fixed-order quantity, and min-max systems to optimize ordering processes.
•  Economic Order Quantity (EOQ) - A formula to determine the most cost-effective quantity to order, minimizing total inventory costs.
•  ABC Analysis - A categorization method that prioritizes inventory items based on their consumption value, enabling focused management.

Deliverables, Templates, and Tools
•  Economic Order Quantity (EOQ) calculation template
•  ABC analysis framework for inventory categorization
•  Safety stock determination model
•  Order quantity strategy examples for practical application
•  Inventory management policy guidelines
•  Cycle counting schedule template

Slide Highlights
•  Visual representation of independent vs. dependent demand
•  Cost breakdown associated with inventory management
•  Graphical depiction of order quantity strategies
•  Step-by-step EOQ calculation example
•  ABC analysis classification chart

Potential Workshop Agenda
Introduction to Inventory Management (30 minutes)
•  Overview of inventory management concepts
•  Discussion on the importance of effective inventory control

Order Quantity Strategies (60 minutes)
•  Detailed explanation of EOQ, EPQ, and QD
•  Group exercises on calculating order quantities

ABC Analysis and Inventory Policies (45 minutes)
•  Interactive session on categorizing inventory using ABC analysis
•  Review of inventory management policies

Cycle Counting and Record Accuracy (30 minutes)
•  Methods for ensuring inventory accuracy
•  Best practices for cycle counting

Customization Guidance
•  Adjust the order quantity examples to reflect your specific inventory needs and demand patterns.
•  Tailor the ABC analysis framework to fit your organization’s inventory categorization criteria.
•  Modify safety stock calculations based on your service level requirements and lead time variability.

Secondary Topics Covered
•  Types of inventory and their specific uses
•  Inventory management policies tailored to item classification
•  Procurement implications of ABC analysis
•  Cycle counting frequency based on item classification
•  Methods of inventory valuation (FIFO, LIFO, Weighted Average)

FAQ
What is the difference between independent and dependent demand?
Independent demand refers to finished goods sold externally, while dependent demand pertains to components used in production.

How can I calculate the Economic Order Quantity (EOQ)?
EOQ can be calculated using the formula: EOQ = √(2DS/H), where D is annual demand, S is ordering cost, and H is holding cost.

What is ABC analysis and why is it important?
ABC analysis categorizes inventory into 3 classes (A, B, C) based on consumption value, allowing managers to focus on the most critical items.

How often should cycle counting be performed?
Cycle counting frequency should be based on item classification: A-items quarterly, B-items biannually, and C-items annually.

What are the costs associated with holding inventory?
Holding costs include capital, storage, and risk costs, typically expressed as a percentage of the unit value.

How do I determine safety stock levels?
Safety stock can be determined using the formula: Safety Stock = z * σdL, where z is the desired service level, σ is the standard deviation of demand, and L is lead time.

What are the benefits of using a perpetual inventory system?
A perpetual inventory system provides real-time tracking of inventory levels, improving accuracy and reducing the risk of stockouts.

What is the reorder point?
The reorder point is the inventory level at which a new order should be placed to replenish stock before it runs out.

What methods can be used to validate inventory?
Common methods include FIFO, LIFO, and Weighted Average Cost methods for inventory valuation.

Glossary
•  Independent Demand - Demand for finished goods sold externally.
•  Dependent Demand - Demand for components used in production.
•  Economic Order Quantity (EOQ) - The optimal order quantity that minimizes total inventory costs.
•  ABC Analysis - A method of categorizing inventory based on consumption value.
•  Safety Stock - Extra inventory held to prevent stockouts.
•  Reorder Point - The inventory level at which a new order should be placed.
•  Cycle Counting - A method of inventory auditing where a subset of inventory is counted on a specific day.
•  Periodic Inventory System - Inventory system that relies on physical counts at specific intervals.
•  Perpetual Inventory System - Inventory system that continuously updates inventory records.
•  FIFO (First In, First Out) - Inventory valuation method assuming the first items purchased are the first sold.
•  LIFO (Last In, First Out) - Inventory valuation method assuming the last items purchased are the first sold.
•  Weighted Average Cost - Inventory valuation method that averages the cost of all items in stock.
•  Holding Costs - Costs associated with storing unsold goods.
•  Ordering Costs - Costs incurred every time an order is placed.
•  Shortage Costs - Costs associated with running out of stock, including lost sales and customer dissatisfaction.
•  Lead Time - The time between placing an order and receiving it.
•  Service Level - The probability of not running out of stock during lead time.
•  Inventory Accuracy - The degree to which inventory records match actual physical inventory.
•  Lot Size - The quantity of inventory ordered or produced at one time.
•  Min-Max System - An inventory control system that sets minimum and maximum inventory levels.

Source: Best Practices in Inventory Management PowerPoint Slides: Supply Chain Fundamentals Module 5 - Inventory Management PowerPoint (PPTX) Presentation Slide Deck, OpEx Academy NZ