Inventory Strategy for Distributed Manufacturing Inventory strategy is the coordinated plan for determining which materials, components, products, tooling, and production information should be held, where they should be located, how much should be available, and when they should be replenished. In distributed manufacturing, inventory may be positioned across: The objective is not simply to minimize inventory. The objective is to maintain the right inventory, in the right form, at the right locations, in quantities that support: An effective inventory strategy connects demand planning, manufacturing capacity, production allocation, supplier performance, logistics, and product lifecycle management. Why Inventory Strategy Matters Inventory allows time, location, demand, and production capability to be separated. A customer may need a product immediately even though production requires several weeks. A factory may need material before the supplier can replenish it. A repair center may need a replacement part even though demand is rare and unpredictable. Inventory provides a buffer between these conditions. However, inventory also creates cost and risk. Excess inventory may result in: Insufficient inventory may result in: The inventory strategy should balance the cost of holding stock against the cost and consequence of not having it. Inventory Is More Than Finished Goods Manufacturing inventory may include: -
Raw materials -
Purchased components -
Subassemblies -
Work in process -
Finished goods -
Packaging -
Spare parts -
Repair parts -
Maintenance supplies -
Tooling -
Fixtures -
Gauges -
Emergency stock -
Returned products -
Recoverable materials Distributed manufacturing may also use digital inventory, which consists of controlled production information retained for future manufacturing. Each inventory category serves a different purpose and requires a different planning method. Inventory Strategy Is Not the Same as Inventory Control Inventory strategy determines: -
What should be stocked -
How much should be stocked -
Where it should be located -
Which risks it should protect against -
Which service level it should support Inventory control manages the daily execution of that strategy. Inventory control may include: -
Receiving -
Identification -
Put-away -
Counting -
Replenishment -
Picking -
Issuing -
Transfers -
Traceability -
Adjustment -
Disposal Strategy defines the intended inventory structure. Control ensures that the actual inventory remains accurate, usable, and available. Begin with the Inventory Objective The organization should identify why each inventory category exists. Possible objectives include: -
Protect production from material delays -
Meet immediate customer demand -
Support regional delivery -
Reduce equipment downtime -
Prepare for seasonal demand -
Maintain emergency readiness -
Preserve long-lead materials -
Support product customization -
Reduce supplier dependence -
Maintain discontinued products -
Enable repair and remanufacturing Inventory without a defined purpose may remain in the system long after its value has disappeared. Define Service Requirements Inventory decisions should reflect the service level expected by customers and operations. Service requirements may include: A higher service target usually requires: The organization should define which products justify higher service levels. Inventory Categories Raw-Material Inventory Raw-material inventory includes materials that have not yet entered production. Examples include: -
Metals -
Polymers -
Chemicals -
Textiles -
Electronic materials -
Wood -
Glass -
Food ingredients Raw-material inventory can provide flexibility because the same material may support several products. It may also create risks involving: -
Shelf life -
Corrosion -
Contamination -
Lot control -
Storage conditions -
Price changes -
Obsolescence Component Inventory Component inventory includes purchased or internally manufactured parts used in larger assemblies. Components may be: -
Standard -
Custom -
Long lead -
Safety critical -
Shared among products -
Product specific Common components can provide flexible inventory value because they support multiple finished configurations. Work-in-Process Inventory Work in process includes materials and products that have entered production but are not complete. It may exist: Excess work in process may hide: -
Bottlenecks -
Quality problems -
Poor scheduling -
Long queues -
Unbalanced capacity Finished-Goods Inventory Finished goods are completed products ready for shipment or sale. Finished inventory may provide: It may also carry high risk when products are: Maintenance, Repair, and Operations Inventory Maintenance, repair, and operations inventory supports equipment and facility operations. It may include: -
Bearings -
Belts -
Lubricants -
Filters -
Sensors -
Cutting tools -
Safety supplies -
Electrical parts Insufficient maintenance inventory can reduce manufacturing capacity. Excess inventory can tie up capital in rarely used items. Spare-Part Inventory Spare parts support installed equipment and products after sale. They may be required for: Spare-part strategy should consider both demand frequency and the consequence of unavailability. Tooling Inventory Tooling inventory may include: -
Fixtures -
Molds -
Dies -
Cutting tools -
Gauges -
Patterns -
Jigs -
Inspection devices Tooling may need to be: -
Stored centrally -
Duplicated across facilities -
Positioned near backup producers -
Maintained periodically -
Protected as intellectual property Tooling location can strongly affect production-transfer time. Emergency Inventory Emergency inventory is held specifically for disruption or urgent need. It may include: Emergency stock should have: -
Defined activation rules -
Ownership -
Inspection -
Rotation -
security -
replenishment -
expiration control Returned and Recoverable Inventory Circular manufacturing systems may hold: -
Returned products -
Repairable assemblies -
Reusable components -
Remanufacturing cores -
Recyclable materials These items should be classified according to condition and intended disposition. Inventory Positioning Inventory positioning determines where stock should be located. Possible locations include: The correct location depends on: -
Demand -
Lead time -
transportation -
production routing -
service requirements -
regional risk -
material value -
product shelf life Centralized Inventory Centralized inventory is held in one or a small number of locations. Potential advantages include: -
Lower total safety stock -
Easier control -
Better visibility -
Reduced duplication -
Concentrated expertise -
Simpler counting Potential disadvantages include: Regional Inventory Regional inventory is positioned closer to major markets or production clusters. Potential advantages include: Potential disadvantages include: Local Inventory Local inventory may be held at: -
Service centers -
Customer locations -
Local assembly sites -
Repair facilities It is most valuable for items with: Supplier-Held Inventory Suppliers may hold materials or components on behalf of the buyer. Potential arrangements include: Supplier-held inventory can reduce buyer storage but may create dependence and visibility challenges. Customer-Site Inventory Inventory may be placed at a customer location when: -
Downtime is costly -
Consumption is predictable -
Response time is critical -
Replenishment can be monitored Ownership, security, counting, and replenishment responsibilities should be clearly defined. Inventory Form The organization should decide not only where inventory is located, but also in what form it should be held. Possible forms include: Holding inventory in a less differentiated form can preserve flexibility. Postponement Postponement delays final product differentiation until demand is better known. The organization may stock: -
Standard platforms -
Common subassemblies -
Generic packaging -
Unconfigured products Regional or local operations can later complete: Postponement can reduce the risk of stocking the wrong finished configuration. Inventory Decoupling Points A decoupling point is the stage where inventory separates forecast-driven production from order-driven production. Before the decoupling point, production may be based on forecasts. After the decoupling point, production may respond to actual customer orders. Examples include: -
Raw material stocked before custom machining -
Common modules stocked before final assembly -
Generic products stocked before regional configuration The location of the decoupling point affects lead time, flexibility, and inventory risk. Make-to-Stock Make-to-stock products are produced before customer orders are received. This approach may be suitable when: -
Demand is stable -
Lead time expectations are short -
Products are standardized -
Forecast accuracy is acceptable Risks include overproduction and obsolescence. Make-to-Order Make-to-order products are manufactured after a customer order is received. Potential advantages include: Potential disadvantages include: Assemble-to-Order Assemble-to-order systems stock common components or modules and complete final assembly after an order is received. This can balance: -
Fast response -
Product variety -
Inventory efficiency Engineer-to-Order Engineer-to-order products require design or engineering after demand is confirmed. Inventory may be limited to: Digital Inventory Digital inventory consists of controlled information needed to manufacture selected products when required. It may include: -
Product models -
Drawings -
Bills of materials -
Material specifications -
Process requirements -
Inspection plans -
Approved facilities -
Production authorization -
Licensing conditions Digital inventory can reduce the need for some physical finished-goods stock. It does not eliminate the need for: -
Materials -
Equipment -
Tooling -
Qualified workers -
Inspection -
Logistics Suitable Uses for Digital Inventory Digital inventory may be useful for: Limits of Digital Inventory Digital inventory may be less suitable when: -
Materials have long lead times -
Tooling is specialized -
Qualification is facility-specific -
Production is highly complex -
Immediate delivery is required -
Product risk is high -
Technical information cannot be shared Inventory Segmentation Not every item should receive the same inventory policy. Items may be segmented according to: ABC Classification ABC classification groups items by financial importance. A Items High-value items that require close control. B Items Moderate-value items that require standard control. C Items Lower-value items that may justify simpler management. Financial value alone should not determine service policy. A low-cost component may still stop an expensive production line. Criticality Classification Items may also be classified according to the consequence of shortage. Possible categories include: -
Critical -
Important -
Routine Criticality may depend on: -
Product safety -
Production stoppage -
Customer downtime -
Regulatory consequences -
Replacement difficulty Demand-Variability Classification Items may be grouped as: -
Stable -
Variable -
Intermittent -
Obsolete or declining -
New and uncertain Different demand patterns require different inventory methods. Combined Segmentation A stronger strategy may combine: -
Value -
Criticality -
Variability -
Lead time -
supplier risk This prevents one-dimensional classification. Safety Stock Safety stock is additional inventory held to protect against uncertainty. It may protect against: Safety stock should be based on measurable risk where possible. Factors Affecting Safety Stock Relevant factors include: Safety Stock Is Not a Permanent Substitute for Improvement Excess safety stock may hide: The organization should reduce underlying causes where practical. Cycle Stock Cycle stock is inventory created by ordering or producing in batches. It is influenced by: -
Order quantity -
Production lot size -
setup cost -
transportation economics -
minimum order quantity Larger batches increase cycle stock. Pipeline Inventory Pipeline inventory is stock moving between locations or production stages. It may include: -
Materials in transit -
Components moving between facilities -
Products awaiting customs -
Items moving to warehouses Long distributed supply chains can contain substantial pipeline inventory. Anticipation Inventory Anticipation inventory is built before expected demand or disruption. Examples include: -
Seasonal stock -
Product-launch inventory -
Pre-shutdown inventory -
Pre-tariff inventory -
Emergency stock It should be linked to a defined event and depletion plan. Strategic Inventory Strategic inventory protects against major risks involving: Strategic stock may be held despite low normal usage. Buffer Inventory Between Facilities Inventory may be positioned between production stages to protect against: Too much buffer inventory can hide poor flow and increase lead time. Inventory Replenishment Replenishment determines when and how inventory is restored. Methods may include: -
Reorder point -
Periodic review -
Min-max -
Kanban -
Material requirements planning -
Supplier-managed replenishment -
Order-driven replenishment Reorder Point A reorder point triggers replenishment when inventory reaches a defined level. It usually reflects: The reorder point should be updated when demand or lead time changes. Min-Max Planning Min-max planning maintains inventory between defined minimum and maximum levels. When stock reaches the minimum, replenishment raises it toward the maximum. Periodic Review Inventory is reviewed at fixed intervals. Order quantities vary according to current inventory and expected demand. Continuous Review Inventory position is monitored continuously or frequently. Replenishment occurs when a trigger is reached. Kanban Kanban uses visual or digital signals to authorize replenishment based on actual consumption. It is most effective when: -
Demand is relatively stable -
Replenishment is reliable -
Inventory locations are controlled -
Quantities are standardized Material Requirements Planning Material requirements planning uses demand, bills of materials, inventory, and lead times to calculate replenishment needs. MRP is useful for dependent demand. Its accuracy depends on: Economic Order Quantity Economic order quantity is a method for balancing ordering cost with inventory-holding cost. It can be useful for stable demand. It may be less appropriate where: -
Demand is highly variable -
Shortage consequences are high -
Supplier risk is significant -
Minimum order quantities dominate Lot Sizing Lot size affects: -
Setup frequency -
cycle stock -
unit cost -
lead time -
flexibility -
quality risk Large lots may reduce setup cost while increasing inventory and obsolescence. Minimum Order Quantities Suppliers may impose minimum quantities because of: -
Setup -
material purchasing -
production economics -
packaging -
transportation Minimum order quantities can create inventory beyond current demand. The organization may negotiate: -
Shared orders -
blanket agreements -
scheduled releases -
alternative materials -
supplier-held stock Supplier Lead Time Inventory requirements increase as replenishment lead time increases. Lead time may include: -
Order review -
material procurement -
production -
inspection -
transportation -
customs The strategy should use actual lead-time performance, not only quoted lead time. Lead-Time Variability Unreliable lead time may require more safety stock than a longer but consistent lead time. Supplier performance should therefore be evaluated for both: -
Average lead time -
Lead-time variation Inventory and Manufacturing Capacity Inventory can compensate for limited or inflexible capacity. An organization may build stock before: -
Seasonal demand -
Maintenance shutdown -
Product launch -
Supplier interruption -
Capacity constraint Flexible capacity may reduce the need for finished-goods inventory. The best balance depends on cost, lead time, product value, and demand uncertainty. Inventory and Production Allocation Production allocation affects where inventory is created. The organization should coordinate: -
Facility assignment -
Material location -
Work-in-process movement -
Regional inventory -
Finished-goods placement Allocating production without considering inventory may create unnecessary transportation and delay. Inventory and Demand Planning Demand planning provides the primary input for inventory strategy. The inventory plan should consider: -
Confirmed demand -
Forecast demand -
Forecast accuracy -
Demand variability -
Regional demand -
Product lifecycle -
Emergency scenarios Inventory should not be based on sales targets alone. Inventory and Supplier Strategy Supplier performance influences inventory requirements. A reliable supplier with short lead times may support lower inventory. A critical single-source supplier with long lead times may require: -
Strategic stock -
Alternate sources -
Reserved capacity -
Design substitution Inventory should not be the only response to supplier risk. Inventory and Logistics Inventory location affects: -
Transportation cost -
delivery time -
customs -
damage risk -
handling -
regional service Centralized inventory may reduce duplication but increase last-mile distance. Regional inventory may improve response but increase total stock. Inventory and Product Design Product design affects inventory complexity. Design strategies that may reduce inventory include: A large number of unique components increases: -
Stocking requirements -
planning complexity -
obsolescence -
supplier dependence Commonality Component commonality allows the same item to support several products. Benefits may include: Modularity Modular products can be stocked as common modules and configured later. This can improve responsiveness without holding every final product variation. Standardization Standardized materials and components may reduce: Standardization should not compromise product performance. Inventory and Product Lifecycle Inventory policies should change throughout the product lifecycle. Introduction New products have uncertain demand and unstable designs. The organization may use: Growth Rapid demand growth may require: -
Capacity expansion -
Increased raw materials -
Regional inventory -
Supplier commitments Maturity Stable demand may support optimized lot sizes, safety stock, and replenishment rules. Decline Demand reduction increases the risk of excess inventory. The organization should reduce: -
Purchase commitments -
batch sizes -
finished-goods stock End of Production A final production decision may be required to support future service demand. The organization should estimate: Service Phase Service inventory may continue long after normal production ends. Strategies may include: Inventory Obsolescence Inventory becomes obsolete when it is no longer usable or economically valuable. Causes may include: -
Product redesign -
Engineering change -
Regulation -
Expiration -
Technology replacement -
Customer loss -
Damage -
Incorrect forecast Obsolescence risk should be considered before inventory is purchased or produced. Engineering-Change Control Product changes should trigger inventory review. The organization should determine whether existing stock may be: Uncontrolled old-revision inventory can create quality and regulatory problems. Shelf Life Some materials and products have limited usable life. Shelf-life control may require: -
Expiration dates -
Storage requirements -
Inspection -
rotation -
testing -
disposal First-expiring, first-out methods may be appropriate. Inventory Rotation Emergency and slow-moving stock should be rotated where possible. Rotation can: Inventory Accuracy Inventory records should match physical stock. Poor accuracy can cause: -
False availability -
Duplicate purchasing -
production stoppage -
delayed shipment -
incorrect planning Accuracy depends on: -
Receiving discipline -
Identification -
transaction control -
location control -
counting -
adjustment approval Cycle Counting Cycle counting verifies selected inventory regularly rather than relying only on a complete annual count. High-value or critical items may be counted more frequently. Physical Inventory A physical inventory is a complete or broad verification of stock. It may reveal: -
Record errors -
misplaced items -
damage -
obsolete inventory -
unauthorized movement Inventory Identification Inventory should be identified using appropriate: -
Part numbers -
Descriptions -
Revisions -
Lots -
Serial numbers -
Locations -
Status labels Ambiguous identification can cause incorrect material use. Inventory Status Inventory may have statuses such as: -
Available -
Reserved -
In inspection -
Quarantined -
Nonconforming -
Expired -
Obsolete -
Customer-owned -
Supplier-owned The system should prevent restricted stock from being used unintentionally. Lot and Serial Traceability Traceability may connect inventory with: -
Supplier -
Material source -
Production date -
Facility -
Inspection -
Customer -
Shipment Required traceability depends on product risk and regulation. Inventory Ownership Inventory may be owned by: -
Buyer -
Supplier -
Customer -
Logistics provider -
Joint venture -
Public agency Ownership affects: -
Working capital -
Insurance -
risk of loss -
accounting -
control -
disposition Consignment Inventory Consignment inventory is physically located with the customer or manufacturer but remains owned by the supplier until used. Potential benefits include: Potential risks include: -
Counting disputes -
damage -
ownership confusion -
replenishment problems Vendor-Managed Inventory Under vendor-managed inventory, the supplier monitors and replenishes stock according to agreed rules. The arrangement requires: Customer-Owned Inventory Customers may supply materials, components, or tooling. The manufacturer should control: -
Identification -
storage -
condition -
usage -
damage -
loss -
return Inventory Visibility Distributed inventory requires visibility across locations and ownership boundaries. The organization may need to know: -
Quantity -
Location -
Status -
Revision -
lot -
ownership -
reservation -
expiration -
availability Visibility should be timely enough to support decisions. Inventory Data Integration Inventory data may exist in: -
Enterprise systems -
warehouse systems -
supplier portals -
manufacturing systems -
logistics platforms -
spreadsheets The organization should define: -
Authoritative records -
update frequency -
data ownership -
reconciliation -
identifier standards In-Transit Visibility Materials and products in transit should be visible where their arrival affects production or customer delivery. Relevant data may include: -
Shipment date -
carrier -
location -
estimated arrival -
customs status -
damage or delay alerts Inventory Reservation Inventory may be reserved for: -
Specific customers -
Production orders -
Emergency use -
Safety-critical products -
Regional demand Reservation rules should prevent double allocation. Inventory Pooling Inventory pooling uses shared stock to support several facilities, regions, or customers. Potential benefits include: -
Lower total safety stock -
Greater flexibility -
Reduced duplication Potential risks include: Regional Rebalancing Inventory may need to be transferred among regions when demand differs from forecast. Rebalancing should consider: -
Transportation -
customs -
product condition -
customer commitments -
remaining shelf life -
handling cost Frequent rebalancing may indicate poor demand planning or inventory positioning. Inventory and Resilience Inventory can improve resilience by providing time to: -
Restore production -
qualify another source -
repair equipment -
reroute logistics -
obtain materials However, inventory alone does not create resilience. Stock may be: Inventory should be combined with capacity, sourcing, and continuity strategies. Strategic Stock for Critical Dependencies Critical stock may be appropriate where: -
Lead times are very long -
Suppliers are concentrated -
Qualification is difficult -
Shortage consequences are severe -
Substitutes are unavailable The organization should define: -
Required coverage period -
Storage conditions -
rotation -
ownership -
release authority -
replenishment Inventory and Geographic Risk Inventory should not be concentrated in the same risk region as the production it is intended to protect. Geographic risks may include: Inventory and Cyber Risk Inventory systems may be disrupted by cyber incidents. Organizations should maintain: -
Data backups -
alternate access -
physical verification methods -
offline emergency records -
controlled recovery procedures A system outage should not make physical inventory unusable. Inventory and Sustainability Inventory has environmental consequences. Excess stock may create: An effective strategy may support sustainability through: Sustainability claims should consider the complete system. Packaging Inventory Packaging should be included in inventory planning. It may include: Packaging shortages can delay otherwise complete products. Inventory Security Inventory may require protection against: -
Theft -
tampering -
counterfeiting -
substitution -
unauthorized use -
environmental damage Security controls may include: -
Restricted access -
surveillance -
seals -
serial tracking -
controlled disposal -
inventory reconciliation Counterfeit Risk Distributed networks may be exposed to counterfeit: -
Electronic components -
Materials -
Spare parts -
Labels -
Packaging Controls may include: -
Approved sources -
certificates -
inspection -
traceability -
authentication -
supplier qualification Inventory Write-Down and Disposal Inventory may lose value because of: -
Damage -
Obsolescence -
expiration -
market decline -
design change The organization should define: -
Review frequency -
valuation method -
approval -
rework options -
resale restrictions -
recycling -
secure destruction Inventory Financial Measures Useful financial measures may include: -
Inventory value -
Carrying cost -
Inventory turns -
Days of inventory -
Obsolescence -
Write-offs -
Working capital -
Storage cost Financial measures should be balanced with service and risk. Inventory Turns Inventory turns measure how often inventory is used or sold during a period. Higher turns may indicate efficient use of stock. Very high turns may also indicate insufficient buffers and frequent shortages. Days of Inventory Days of inventory estimates how long current stock will support expected demand. It should be interpreted according to: -
Item criticality -
Lead time -
variability -
product lifecycle Fill Rate Fill rate measures the percentage of demand supplied immediately from available inventory. Different products may require different fill-rate targets. Stockout Rate Stockout rate measures how often required inventory is unavailable. Stockouts should be analyzed according to: -
Product -
customer -
region -
cause -
consequence Excess and Obsolete Inventory Excess inventory exceeds expected need. Obsolete inventory is no longer usable or saleable under normal conditions. Measures should distinguish the two. Inventory Aging Inventory-aging analysis shows how long items have remained in stock. Aging can reveal: -
Slow-moving products -
Obsolescence risk -
poor rotation -
overbuying -
inaccurate forecasts Inventory Strategy by Item Type High-Value, Predictable Items Possible strategy: -
Tight control -
Accurate forecasts -
Frequent review -
Limited safety stock -
Reliable replenishment Low-Value, Critical Items Possible strategy: High-Value, Intermittent Items Possible strategy: -
Make to order -
Repair -
remanufacture -
digital inventory -
pooled regional stock Perishable Items Possible strategy: Long-Lead Items Possible strategy: -
Strategic inventory -
supplier commitments -
alternate sources -
early ordering -
design substitutes Common Inventory-Strategy Mistakes Minimizing Inventory Without Considering Service The lowest inventory level may create unacceptable shortages and downtime. Using One Policy for Every Item Different products require different service levels and replenishment rules. Ignoring Regional Demand Central stock may not meet local response requirements. Holding Finished Goods Too Early Early configuration increases the risk of stocking the wrong product variation. Ignoring Supplier Variability Average lead time may hide significant delivery uncertainty. Treating Digital Inventory as Immediate Availability Files do not replace materials, tooling, capacity, and logistics. Ignoring Tooling and Maintenance Inventory Production can stop even when product materials are available. Failing to Control Revisions Obsolete inventory may be used accidentally. Overlooking Inventory Ownership Unclear ownership creates accounting and operational disputes. Using Safety Stock to Hide Poor Processes Inventory should not replace supplier, quality, or planning improvement. Ignoring Pipeline Inventory Stock in transit remains part of the inventory investment and risk. Failing to Review Slow-Moving Stock Inventory may remain long after its purpose has ended. Inventory-Strategy Questions Organizations should ask: -
What service level must the inventory support? -
Which items are critical? -
Which demand is predictable? -
Which demand is intermittent? -
What is the replenishment lead time? -
How reliable is that lead time? -
Where should inventory be positioned? -
In what form should it be held? -
Which products can use postponement? -
Which items are suitable for digital inventory? -
How much safety stock is justified? -
Which inventory protects against supplier or geographic risk? -
Who owns the stock? -
How will revisions, lots, and expiration be controlled? -
How will inventory be rebalanced? -
Which measures will indicate success? -
When should the strategy be reviewed? A Practical Inventory-Strategy Process 1. Define Service Requirements Establish customer, production, repair, and emergency response expectations. 2. Classify Inventory Separate raw materials, components, work in process, finished goods, service parts, tooling, and digital inventory. 3. Segment Items Evaluate value, criticality, demand variability, lead time, lifecycle, and supplier risk. 4. Analyze Demand Use confirmed demand, forecasts, regional requirements, service history, and scenarios. 5. Analyze Supply Review supplier reliability, replenishment lead time, capacity, materials, and geographic risk. 6. Select Inventory Form Determine whether stock should be held as raw material, common components, modules, finished goods, or digital information. 7. Position Inventory Choose central, regional, local, supplier, customer, or pooled locations. 8. Set Replenishment Rules Define reorder points, safety stock, minimum and maximum levels, lot sizes, and review frequency. 9. Establish Control Requirements Define identification, status, ownership, traceability, counting, security, and expiration management. 10. Coordinate with Capacity and Allocation Ensure inventory supports actual production routes and qualified facilities. 11. Measure Performance Track service, shortages, turns, aging, carrying cost, obsolescence, and accuracy. 12. Review and Adjust Update the strategy as demand, products, suppliers, lead times, and risks change. Minimum Inventory-Strategy Requirements A distributed manufacturing inventory strategy should include: -
Defined service objectives -
Inventory classification -
Item segmentation -
Demand and lead-time analysis -
Criticality assessment -
Safety-stock methodology -
Replenishment rules -
Inventory-positioning decisions -
Ownership definitions -
Revision and traceability controls -
Shelf-life and condition controls -
Supplier and geographic risk considerations -
Digital-inventory criteria -
Inventory-accuracy requirements -
Performance measures -
Review responsibility and cadence A Working Definition DistributedManufacturing.info defines inventory strategy as: The coordinated plan for determining which physical materials, components, products, tooling, service parts, and digital production information should be retained, in what quantities and forms, at which locations, and under which replenishment and control rules to support customer service, production continuity, resilience, cost, and lifecycle requirements. The best inventory strategy does not seek the lowest possible inventory. It seeks the lowest responsible inventory capable of supporting the required service, production, and risk objectives of the complete manufacturing network. | 