Inventory Management


What is Inventory Management

Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time. Any organization which is into production, trading, sale and service of a product will necessarily hold stock of various physical resources to aid in future consumption and sale. While inventory is a necessary evil of any such business, it may be noted that the organizations hold inventories for various reasons, which include speculative purposes, functional purposes, physical necessities etc.

Source - Management Study Guide

Inventory management is a very important function that determines the health of the supply chain as well as the impacts the financial health of the balance sheet. Every organization constantly strives to maintain optimum inventory to be able to meet its requirements and avoid over or under inventory that can impact the financial figures.

Inventory is always dynamic. Inventory management requires constant and careful evaluation of external and internal factors and control through planning and review. Most of the organizations have a separate department or job function called inventory planners who continuously monitor, control and review inventory and interface with production, procurement and finance departments.

Source - Management Study Guide


  • Norgren
  • EMEA DC, Alpen, Germany
  • 200K SKUs managed
  • Norgren Express which consists of 10K SKUs 


  • Norgren Express had just been introduced (<3 yrs old)
  • 1st Pick availability at 80% 
  • Norgren Express growth stagnant due to high stock out


  • Understand the root cause for stock outs
  • Improve the inventory visibility to senior management
  • Improve 1st Pick availability from 80% to 98%
  • Support growth of Norgren Express business


  • Introduced Sales & Operation Planning to improve the forecasting process, rough cut capacity planning and raw material procurement process
  • Introduced supplier performance management to improve the performance of the bottom performing suppliers/factories
  • 12 months rolling order book visibility to senior management
  • Introduced new forecasting process for new items


  • 98% 1st pick availability
  • 97% On Time Deliver in Full
  • Year 1 – 20% growth
  • Year 2 – 20% growth

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