Pipeline stock refers to the system stock, not just the stock at one point in the supply chain. For example, if we wanted to assess the stock in the supply chain for making aluminium cans, we could visit the factory which ‘bottles’ cola into cans and find that they have three days’ stock of cans. But they will also have pipeline stock of the finished product -cans of cola – in their warehouse, on the road, at distributors, and at retailers. Furthermore, they would have aluminium rolls in stock, on their way to their facility and in their supplier’s warehouse. Upstream, bauxite would be on the road, in stores and in transit from the mines. All this is pipeline stock. When looking to create a lean or agile supply chain, the total system inventory will be mapped to calculate the opportunities to be gained by aligning supply and demand more effectively. See also Bullwhip Effect, Muda and Supply Chain Alignment.

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