The Inventory Planning Methods That Decide Whether You Are Overstocked or Out of Stock
This guide describes the present use, application and characteristics of the five inventory planning methods supply chain professionals actually run, Kanban, re-order points, fixed order interval, run-out time and Material Requirements Planning, and explains how each is applied in a real planning environment.
Instant download · E-Book (PDF) · 23 pages · Lifetime access
The stock problem is rarely a stock problem.
It is a planning method problem.
Five tactical methods that balance supply against demand, part by part
Before any method makes sense, you have to see the damage. Rising back-orders, more money tied up in inventory while sales stay flat, higher customer churn, cancellations, warehouse space that has run out, production capacity you cannot capitalise on, worsening relationships with key customers and distributors, and obsolete stock you do not need, eight symptoms that point at poor or absent inventory planning.
Inventory planning is where demand analysis and the ordering of new inventories meet. These methods sit at the tactical level: balancing supply and demand, and initiating, controlling and monitoring the manufacturing and purchasing orders that keep material flowing and value-adding work uninterrupted.
Most of them work in manufacturing and in distribution alike. What changes is the trigger, the review cycle and how much data the method expects you to keep current.
The guide runs through all five methods, Kanban, re-order points, fixed order interval, run-out time and MRP, with the characteristics, benefits and rules of each, and finishes by putting them side by side so you can see which one belongs on which part.
The symptoms come first
Back-orders, flat sales with rising stock value, churn, cancellations, no warehouse space and obsolete stock.
Tactical, not strategic
These methods balance supply and demand and control manufacturing and purchasing orders, not network design.
Five methods, one purpose
Kanban, re-order point, fixed order interval, run-out time and MRP, each with a different trigger.
Plant and distribution
Most inventory planning methods apply in manufacturing as well as in the distribution industry.
Twenty-three pages that take you from the symptoms to the method you need
Picture illustrations and short bullet-point concepts, written so a planner can read one method in ten minutes and apply it to a part group the same afternoon.
Introduction and the symptoms
What poor or absent inventory planning looks like on the ground, in eight measurable symptoms.
Kanban
Benefits, characteristics, the rules of the system and a worked Kanban profile, pages three to six.
Re-order points
The trigger-based method, its characteristics and where it earns its keep.
Fixed order interval
Review-cycle ordering: what it assumes about demand and how it behaves when that assumption breaks.
Run-out time
Ordering on how fast the stock is falling rather than on where it sits against a static level.
Material Requirements Planning
The longest chapter, pages ten to twenty-one: evolution, benefits, prerequisites, key terms, where-used and pegging data.
MRP in practice
Dependent versus independent demand, the actions of the MRP planner and the characteristics of the system.
Methods compared, and the challenges
A summed-up view of all the method characteristics, the key challenges in using MRP, Kanban vs. MRP, conclusion and references.
A clear look at what the inventory planning guide covers
The cover and a page straight from inside the e-book. Every method is written the same way: what it is, how it triggers an order, and what it asks of your data.
Five methods, side by side,
with what each one asks of you.
Kanban, with its rules
Benefits, characteristics, the rules of the system and a profile of a Kanban set-up, across four pages.
Re-order point ordering
Trigger on stock level. The characteristics that decide whether it suits your demand pattern.
Fixed order interval
Order on the review cycle instead of the level: predictable buying windows, steadier supplier relationships.
Run-out time
Order on how quickly the stock will run out, so lumpy demand does not catch the reorder level cold.
MRP, in the depth it deserves
Eleven pages covering evolution, benefits, prerequisites, key terms, where-used and pegging, dependent versus independent demand and planner actions.
A comparison you can act on
Method characteristics summed up on one page, plus Kanban vs. MRP, so the choice stops being an argument.
How to work through the five methods
Read the symptoms against your own numbers
Use the eight symptoms in the introduction to confirm the problem is planning method, not forecast error or supplier reliability.
Match the trigger to the demand pattern
Kanban for steady line-side flow, re-order point for level demand, fixed order interval for scheduled buying, run-out time for stock that drains at its own rate.
Check what the method asks of your data
Each chapter names its characteristics: review cycle, record keeping, accuracy of stock positions, and how often the parameters need maintenance.
Move dependent demand to MRP
Where a part is driven by a bill of materials, work through the prerequisites, key terms, where-used and pegging data before trusting the planner actions.
Compare and decide
Use the summed-up characteristics table and the Kanban vs. MRP page to assign one method per part group, then review at the next planning cycle.
Written for the people who have to
choose a method and live with it
Stop re-deciding the same replenishment question
One section per method, with the characteristics that decide fit, so the choice is made once per part group and defended with a document.
Tie the stock problem to the planning method
Back-orders and rising inventory value are symptoms of a method mismatch. This guide makes that link explicit.
Run the same guide across both worlds
Most of these methods apply in distribution as well as manufacturing, and the review cycle is what changes.
Get the MRP basics right before blaming the system
Prerequisites, key terms, pegging data and planner actions, the parts of MRP teams most often skip.
Every inventory planning question people ask,
answered by a structured guide
Planners, buyers and supply chain managers searching for inventory planning guidance ask these exact questions. This guide gives you a documented answer to all of them.
The tactical rules that decide when to order and how much, covering the initiation, control and monitoring of manufacturing and purchasing orders so material flow and value-adding work continue without interruption.
Five: Kanban, re-order points, fixed order interval, run-out time, and Material Requirements Planning (MRP), plus the evolution of material planning systems that led to MRP.
Rising back-orders and past dues, more money in stock while sales stay flat, high customer churn, poor service levels and cancellations, not enough warehouse space, under-used production capacity, strained customer relationships, and obsolete or unwanted stock.
Kanban reacts to consumption at the point of use with a visual signal; MRP calculates requirements from a bill of materials, master schedule and stock records. The guide compares them page by page and summarises the characteristics of every method.
Accurate master production schedule, bill of materials, inventory records, and where-used and pegging data, along with a planner who knows which MRP actions to take. The guide covers each prerequisite.
Yes. Most inventory planning methods are used in both industries; what changes is the trigger and the review cycle, and MRP applies where demand is dependent on a product structure.
Before you buy
What exactly is included in this purchase?
Optimize Your Inventory: A Guide to Planning Methods, a 23-page e-book of over 4,000 words covering Kanban, re-order points, fixed order interval, run-out time and MRP, plus the symptoms of poor planning, a comparison of the methods, a conclusion and references.
What format is the e-book in?
PDF. It reads identically on a laptop, tablet or phone, needs no special software, and prints cleanly if you want a method chapter on the planning desk.
Is this a theory book or a working guide?
A working guide. Each method is presented with its benefits, characteristics and rules, and the guide closes by summing the method characteristics up so you can assign one per part group.
Which method should I use for my parts?
That is the question the guide exists to answer. The comparison pages, including Kanban vs. MRP and the summed-up characteristics table, let you match the trigger to the demand pattern you actually see.
Can I buy this with the inventory tools?
Yes. The guide is sold as a bundle with the Inventory Optimization Tool and the Excess and Obsolete Inventory Policy for a fuller inventory management toolkit at a further discount.
Is it suitable for someone new to planning?
Yes. Picture illustrations and bullet-point concepts carry the fundamentals, and the MRP chapter starts at the evolution of material planning systems rather than assuming you already know them.
What will I receive after purchase?
Instant access to the e-book from your account, plus a download link sent to your email address. Lifetime access, no subscription.
Stop planning inventory by feel.
Get the SCMDOJO guide to inventory planning methods and put Kanban, re-order point, fixed order interval, run-out time and MRP to work on the right parts, starting this planning cycle.
Instant download · E-Book (PDF) · 23 pages · Lifetime access · No subscription
