Development of a consumable inventory management strategy for the supply management unit

Abstract

The goal of this project is to develop a consumable inventory management strategy for the Supply Management Unit (SMU) that will be applicable to other Department of Defense (DoD) supply support organizations. The SMU is a Marine Corps wholesale activity that provides Class IX (consumable repair part) supply support to 160 Marine Corps' units. The SMU uses the Days of Supply model to establish Requisitioning Objectives (RO) and Reorder Points (ROP), which are based upon historical usage, lead time, and supply data. Historical data is generated from Class I Natural Programs that were designed in the early 1970s. Since then, inventory management has evolved from warehouses packed with supplies to warehouses carrying just enough inventories to satisfy customer demand. The evolution of inventory management has proven that there is a direct relationship between inventory and cost in that the ability to efficiently manage inventory serves as a catalyst for reducing cost. Efficient inventory management involves the ability to forecast demand accurately, establish inventory levels prudently, and provide optimal support to the customer cost-effectively. Therefore, this project will focus on developing an inventory management strategy that efficiently balances readiness with supply chain system-wide costs.