Maintaining a minimum level of inventory. While reaching a zero inventory level is improbable, reducing inventory to a minimum should result in lower costs (for example, of warehousing and spoilage) and therefore increased profitability. Contemporary concepts such as lean supply regard inventory as a non-value adding activity, or waste. Supply processes are designed to synchronise supply with the need, so that the need for inventory is minimised. Approaches like ‘just in time’ [JIT] work well when demand is predictable and driven by a master forecast. See also Just in Time.
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Discover the world’s largest Glossary of Procurement terms
With over 800 Procurement specific terms (and growing) you will find everything you need to know or thought you knew about the Procurement function. Our aim is to provide you with a comprehensive list collated from the Comprara Groups hub of training and consulting source materials.The Procurement Glossary has been compiled by industry expert Paul Rogers.
