Brief information about inventory management.

1. Introduction to Inventory Management
Ashutosh Mishra
Mechanical Engg., Lean Consultant

2. What is Inventory Management
Inventory management is about having right quantity of
a. Raw material
b. Work in Progress (WIP)
c. Finished Goods

3. Why do we need to manage inventory
 Cash flow
 Wear & Tear
 Product expiry
 Technological changes

4. How to manage right level of Inventory
 Defining reorder level of the stock i.e. Lead time demand
+ Safety stock (Safety stock = Max. daily usage * Max. Lead time in days – Average
daily usage * Avg. Lead time in days)
 Sales forecasting & Identifying Lead time
 Prioritizing inventory (based on Pareto principle)
 Strong Inventory tracking system
 Proper SLA should be defined
 Coordination in PPC dept.

5. Benefits of Inventory Management
 Increased Inventory Turnover ratio
 Reduced Lead time
 Increased information transparency
 Increased sales
 Improved Production Planning & Control
 Increased employee morale

6. Thank you
Ashutosh Mishra
+91 8765653833