Inventory Management, Supply and Logistics

Inventory management in logistics and supply chain management is the practice of ordering, storing, tracking, and controlling goods so that the right products arrive in the right place at the right time.
 

Core Objectives

• Balance supply and demand: Prevent costly stockouts or excess holding.

• Optimize working capital: Reduce money tied up in unsold merchandise.

• Ensure visibility: Track stock movement from suppliers to end customers.
   

Key Types of Inventories

• Raw materials: Basic inputs used to manufacture products.

• Work-in-progress (WIP): Partially completed items currently in production.

• Finished goods: Final products ready for customer purchase.

• MRO supplies: Maintenance, repair, and operating items.
   

Common Methods & Techniques

• Just-in-Time (JIT): Orders inventory only as it is needed to minimize holding costs.

• Economic Order Quantity (EOQ): Calculates the ideal order size to lower setup and holding costs.

• ABC Analysis: Categorizes inventory by turnover and value to prioritize management focus.

• Safety Stock: Maintains an extra buffer of stock to absorb unexpected supply chain delays.