Inventory & Replenishment Planning

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.

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?


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 (Days Inventory Outstanding)
  • – 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. 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