Memo SCILaid

From: Francois Damba

Date: 22 February 2021

RE: UNIT 2 – TASK 8 – MANAGING INVENTORY

The Operation in Betaland has so far involved ‘pushing’ inventory into the supply chain.
SCILaid want to move from a ‘push’ to a ‘pull’ inventory policy. This means supplying to meet a
known demand and will enable them to better manage inventory.

1. What information do we need to capture on the current operation that will enable
us to move to a pull inventory policy, and where can we obtain this information?
- We need to learn or study from the previous operation and have at least the
quantities of goods supplied and the number of beneficiaries who were the recipients
of these goods including the age groups and gender per month, this will assist us
plan knowing exactly what is required for effective response, which will see us move
from push to pull inventory policy.
- Some correct information can be obtained from the records of the initial assessment
reports this is because there are people who were first on the ground at the scene of
this humanitarian event, these reports contains the information and number of
people involved in the event and their needs. Such information allows the inventory
manager to make supply decision in order to meet the humanitarian demand.

2. The hurricane is likely to have an impact on the future levels of demand. What
information will you need to gather to enable you to ‘forecast’ the effect of the
hurricane on your inventory holding?
- From the past experience of hurricane disaster occurrence we have noted that there
will be a lot of disruptions in terms of cargo movements from regional to in-country
where goods are needed, there will be no ship movement due to hurricane. This will
have impact on the deliveries and stocks levels and reduction in stock at hand
which will then result in supply chain failure to meet the demand from camps. Here,
through the already shared information, the likelihood and predicted impact of the
hurricane impacting on the levels of demand, I feel this information on its own is a
trigger of an urgent action required.
- The required information for me to be able to forecast the effect of the hurricane on
my inventory is:
- The total number of the beneficiaries.
- Total tonnage being delivered to the beneficiaries per month
- The short-term needs, will allow myself as the inventory manager to make supply
decisions, in order to meet the humanitarian demand. It will be also important to
know if the safety stock is still safe so that orders will include the replenishment of
the used safety stock.
- I also need to know the supplier lead time because the time horizon of the forecast
must be linked to the supplier lead-time. If the supplier lead-time is at least three
months, a forecast of demand three months or more into the future will be required

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 so as to be able to meet the demand by making correct orders that will enable timely
deliveries of the right goods at the right time.
3. The Programme Officer has decided against budgeting for safety stock for the
coming year. Can you present your argument that this may not be the best
course of action?

Regards

Francois

To answer this task, you will find the following learning material section helpful:

2.8. Managing Inventory Levels

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