Inventory Cost Reduction

Course Length: 02 days
Language: English

Inventory is one of the biggest costs in companies, between 20%-40% for companies to carry its inventory. Meanwhile, small inventory is also not good because it will impact service level. Inventory management is a good practice for any company. If you are not keeping a watchful eye on your inventory or counting stock regularly, you are setting yourself up for potential inventory errors and challenges. Proper inventory management really can make or break your business!


For a good inventory management, your team really need to have proper knowledge, tools and methods to:

  • Understand what is the component of inventory cost

  • To sort inventory so we can focus on the highest cost

  • What is the source of highest cost inventory

This training will provide your team the toolkits needed to reduce inventory cost. 

Course outline

  • Inventory function in the company

  • Component of inventory cost: carrying, ordering, hedging, capacity cost

  • ABC inventory class: tools to sort the highest contribution of cost and how to reduce it

  • Case study: ABC inventory & calculate cost

  • Forecast as a reference to decide stock: forecasting method, forecast accuracy, improving forecast accuracy and how is related with inventory cost

  • Case study: Make a forecast, calculate accuracy, simulate decreasing forecast error and calculate the effect to inventory cost

  • Case study: Time phase order point, distribution requirement plan (replenish stock in distributor)

  • Safety stock to anticipate demand & supply fluctuation: how to calculate, decide service level that will impact inventory cost

  • Case study: Calculate safety stock for some service level and calculate the cost

  • Calculate quantity to replenish the stock and what is the influence to the cost

  • Case study: Lot for lot, economic order qty

  • Decide timing to replenish the stock and effect to the cost


Training methodologies

Interactive discussions, presentations, concept introduction, examples, and exercises

Who should attend

This training has many benefits for those who involve in activities to decide the quantity of inventory, such as: material manager, inventory manager, sales & marketing.

For further information and registration, please email us at media@cel-consulting.com

©2019 by CEL Consulting.