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Inventory, Logistics and Expediting (L2M5)

Module purpose

On completion of this module, learners will be able to identify the key role that inventory has to play and define the principles and processes associated with effective logistics control, explaining how effective expediting can be achieved in procurement and supply.

Module aim(s)

Inventories can account for a significant cost for many organisations. This module has been designed to enable learners to appreciate the concept of inventory and to explain contemporary methods for reviewing and planning effective inventory control. The module also focuses on the logistics challenge and on effective logistics control measures. Finally, learners will be able to explain how effective expediting can be achieved in procurement and supply through effective planning and processing.

Next steps

Joining a CIPS qualification programme means you will join the largest Institute in the world for those working in procurement and supply. You can join as a member online today. Once you've become a CIPS member you can book your examinations online.

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Learning outcomes, assessment criteria and indicative content

1.1 Identify the classifications of different types of inventory

Opening stock, work in progress, safety stock and finished goods
Obsolescent and redundant stock
Direct and indirect supplies
ABC classifications of stock that may apply
Dependent demand and independent demand items of stock

1.2 Identify the direct and indirect costs of holding inventory

Direct and indirect costs that are associated with holding inventories
Options to reduce costs whilst mitigating any negative impact on service levels

1.3 Identify techniques associated with inventory control

Re-order quantities
Re-order levels
MRP and MRPII
ERP
Just in Time
Bar coding
Subjective and objective forecasting

1.4 Identify the key aspects associated with the handling, packaging and storage of supplies

The use of materials handling equipment and palletisation and unit loads, packing and packaging and the use of automation in warehousing

2.1 Identify the key principles of stores and warehousing facilities

The effective and efficient flows of inventory
Reduction of life-cycle costs
Space optimisation

2.2 Identify the strengths and weaknesses associated with modes of freight transportation

Road
Rail
Air
Sea
Pipeline

2.3 Identify types of Incoterms in international logistics.

E, F, C and D terms
Incoterms rules and incorporation into the sales contract

2.4 Identify legislative regulations that affect international sourcing

How to ensure compliance with legislation and regulations for supplies from international sources

2.5 Describe the documentation that is used in transportation of supplies

The single administrative document
Packing list, waybill, consignment notes, bill of lading
Certificate of origin
Letters of credit or other financial documentation

3.1 Explain the assessment of costs of inventory and the cost of stock outs

Monitor levels of inventories and take actions to mitigate over supply and minimise the risk of stock outs
The use of forecasting to achieve timely delivery of supplies
Track deliveries and documentation
The use of forecasting, difficulties and techniques

3.2 Explain the planning process associated with expediting delivery