Supply Chain: Inventory Control & Safety Stock Calculation

Define inventory as raw materials, work in progress, and finished goods, and emphasize turnover as a key kpi driving revenue and earnings, while noting non stock items used internally.

Explore how small order quantities in more frequent orders reduce safety stock and overall inventory. Evaluate splitting the supply approach and its impact on capacity, changeovers, transport, labor, and costs.

Centralize key distribution centers to hold most safety stock, enabling daily replenishments and emergency express deliveries, while evaluating capacity, fulfillment times, and market proximity to determine the optimal dcs mix.

Explore make to stock versus make to order strategies, defined by forecasting and sales orders, where stock is produced ahead or on demand, shaping inventory, safety stock, and lead times.

Explore how make-to-order strategies reduce safety stock by shortening lead times, and how supplier performance management, transparency, and collaboration lower orders, MOQs, and price breaks through beneficial annual commitment agreements.

Apply skew rationalisation to kill underperforming skus using Pareto analysis, then standardize materials to reduce total items, lower safety stock, and free warehouse space for productive inventory.

Adopt a helicopter view to align safety stock across departments, enabling each to focus on its area of influence and reduce total safety stock to about 25% of demand.

Revisit the safety stock paradigm and conclude the topic, then take a brief five-second break to view signboards unrelated to safety stock.