Important Function

• Inventory management is an important function in controlling assets in the supply chain.
• Individuals working in the supply chain should have at least a basic understanding of the roles, costs, and benefits of inventories.
• This certification track is intended to provide students with an understanding of the basics of inventory management and to enable effective contributions to an organization.
• Inventory is often obtained from suppliers in the form of raw materials and other goods and materials through the procurement department.
• Inventory also includes work in process and finished products from manufacturing operations.

Key Elements

• The importance and use of inventory in the supply chain.
• Exposure to the different types of inventory.
• Techniques for effectively managing and controlling inventory levels.
• The relationship between forecasting and inventory management.
• Financial impacts of inventory assessment.

Inventory Basics

• Ideally, an organization would have sufficient inventory to satisfy customer demands for products without losing any revenue due to insufficient stock.
• An organization does not want to have too much inventory on hand, because it costs too much money to both acquire and hold inventory.

Problematic Reasons for Carrying Inventory

• Poor demand planning, poor forecasting, and high forecasting error
• Product theft
• Poor supplier performance (inaccurate lead time, late delivery, poor quality, etc.)
• Poor production yields that require greater inputs for the desired output
• Poor or non-existent inventory planning and tracking systems
• Poor inventory counting systems that reduce stock accuracy
• PLarge-quantity purchases to obtain lower unit prices that are outweighed by higher carrying costs