ABSTRACT
This chapter discusses how to work out the right level of material inventory. Material shortages are typically the largest single cause of on-time, in-full delivery failures. The chapter discusses the key reasons why raw material shortages occur and how to take action to reduce manufacturer's risk of shortages. It describes why poor supplier performance is usually not the reason why they have shortages and what just-in-time supply is and how it works. To work out the best way to manage materials, one can use a plan for every part (PFEP). Reduce demand and supply variability. By ordering a regular amount in a regular pattern, will make it easier for supplier to meet their demand reliably. A PFEP is essentially a table listing each material and the key characteristics of that material. This includes physical characteristics, such as the type, size, and weight of products and packaging; supply chain characteristics, such as the minimum order quantity, supplier details, and lead time.
