OBJECTIVES
The training course INVENTORY & REPLENISHMENT PLANNING has the following objectives:
- Introduce the attendees into the business context of Inventory & Replenishment Planning, explaining the activities for planning the inventory of the products (stock sizing and control) across the Supply Chain networks and for planning the distribution / reorders of Stock Keeping Units at the customer locations.
- Show the processes, the typical inputs and outputs of Inventory Management & Control systems, and also the quantitative parameters used to project and size these planning systems.
- Show how to build a KPI dashboard to evaluate the inventory levels and the quality of a replenishment plan
- Analyze the most frequently used methodologies for planning the inventory levels on the distribution / production nodes of the Supply Chain.
- Show the methods and the formulas for calculating safety stock.
- Explain the policies of store replenishment (re-assortment of point of sales or customer location, from production plants / logistic warehouses) and of inventory allocation (product stocks allocation from warehouses to stores).
- Inventory & Replenishment Assessment: define the steps for a reengineering project of the inventory & Replenishment planning system.

TARGET QUESTIONS
The training course INVENTORY & REPLENISHMENT PLANNING aims to provide answers to the following questions:
- Which are the processes, the steps and the typical workflows of the macro-process “Inventory & Replenishment Planning”?
- Why is it important to control the inventory? Which are the related costs to the inventory planning of stocks into the Supply Chain stages?
- How to plan and how to measure the customer service level?
- Which are the typical Key Performance Indicators for a dashboard monitoring and controlling product inventory levels?
- Which are the specific methods and techniques of Inventory Planning? How to control the levels of stocks of SKUs at locations?
- Which are the most common methods to determine the gross and net requirements of products at customer locations (Replenishment Planning)?
- How to quantify the safety stock?
- How can we collaborate with customers and suppliers to maximize the global Supply Chain service level while minimizing inventory?
- Which are the step for building a DRP system?
- How to manage slow moving items / class C items / spare parts?
- How to associate the best replenishment algorithm to the combination item / warehouse?

AGENDA
1. Inventory & Replenishment Planning
- Inventory Planning in the context of Supply Chain networks of production and distribution systems
- The role and the importance of inventory in the integrated Supply Chains
2. Stock classification
- Cycle stock, safety stock, strategic stock, in transit stock, obsolete stock
- Analysis of each stock category, with numerical examples
3. Costs related to inventory & replenishment
- Inventory holding costs, stockout costs
- Setup costs, logistics costs
- Numerical examples
4. Inventory Planning and Customer Service Level
- Definition of customer service level
- KPIs for measuring the customer service level (OTIF, Fulfillment rates)
- Customer service level target definition: methods
5. KPIs for measuring effectiveness of Inventory Planning policies
- Average Inventory Level
- Inventory Turn
- Inventory coverage index
- ABC Analysis of inventory – revenue for products / customers
- Formulas to calculate the length of stock coverage intervals
6. Replenishment Planning policies
- Inventory Management (pull methods)
- Material / Distribution Requirements Planning (push methods)
- Replenishment algorithms: reorder point, economical order quantity, minimum – maximum, coverage interval
- Calculation of economical lot size (Wilson’s formula)
- “Mixed” models: optional reorder, inventory level control
- Numerical examples of replenishment algorithms
- DRP methodology: input and output data, step to project a DRP system, KPI and reporting definition, replenishment algorithms’ choice. Simulation of business cases with Microsoft Excel on two stages (warehouses to stores; plants to warehouses)
- Lot sizing and lead time management in DRP systems
7. Formulas for calculating safety stock
- Variability of customer demand and supplier lead time
- Safety stock and customer service level
- Formulas for static and dynamic safety stock
8. Replenishment for sporadic items
- Poisson’s model for slow moving items
- Numerical examples of calculation
9. Stock Allocation
- Methods for real-time stock allocation to customers: priority list, setup, Sell-Through
10. Collaborative Planning methods: VMI and CPFR
- Consignment Stock, Continuous Replenishment Program
- Workflow and rules for Vendor Managed Inventory systems
- Workflow and rules for Collaborative Planning Forecasting & Replenishment systems