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Training · 05

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Purchasing, Inventory and Planning: Performance in the Supply Chain

Let inventory, purchasing and planning look at the same number.

Duration
2 daysalso as 1 day or 4 half days
Participants
Sized to your teamwe agree the group size together
Method
Interactive workshopcase work, Excel calculations, group work
Trainers

Teaches how to decide when sales says “keep everything in stock”, finance says “cut inventory” and purchasing says “let's buy in bulk”. Participants work on the cash language of inventory, forecast error, safety stock, order quantity, a supplier's total cost and sales and operations planning, using the figures of a fictional water treatment company. They end by building a management rhythm that tracks supply chain performance with a few indicators (KPIs).

After the programme, participants

  1. 01

    Talks about inventory in days, turnover and carrying cost; calculates the cash and profit effect of reducing inventory.

  2. 02

    Classifies materials with ABC-XYZ and proposes a different inventory and purchasing policy for each class.

  3. 03

    Measures forecast error and bias; separates the forecast from the target.

  4. 04

    Calculates safety stock, reorder point and order quantity together with the service level target; tests the real return of a bulk-purchase discount.

  5. 05

    Compares suppliers by total cost of ownership rather than unit price.

  6. 06

    Sets up the monthly sales and operations planning meeting and the supply chain indicator (KPI) set, including OTIF.

The two days

Day 1

  1. The end-to-end supply chain: service, cost and cash
  2. The language of inventory: categories, ABC-XYZ and slow movers
  3. Demand planning: forecast, error and bias
  4. Inventory policy: safety stock, reorder point and order quantity

Day 2

  1. Purchasing: total cost of ownership and supplier positioning
  2. Sales and operations planning (S&OP): balancing demand and supply
  3. Supply chain performance: indicators, OTIF and the management rhythm