NAPM InfoEdge
July 1997, Vol. 2 No. 11

Purchasing's Role in Inventory Management

Table of Contents
  • Where Purchasing Fits In Members Only Content
    As organizations implement supply chain operations, applications such as inventory management must evolve to support the creation of a "value chain," where true value is measured in terms of the ability to meet changing customer requirements. Inventory management is a total enterprise concern, a business issue that requires cross functional involvement to assess the needs of the organization and its internal customers.

  • The Basics Of Inventory Management Members Only Content
    Any discussion on inventory management should start with the precepts that form the basic platform of knowledge. To begin, practitioners should understand the various classifications and inventory types. The following definitions are generally accepted:

  • Inventory Forecasting Members Only Content
    Accurately forecasting future demand is an exacting but necessary enterprise because it is central to the planning and control functions of an organization. Effective forecasting requires accurate data, the appropriate forecasting technique, and the ability and experience to interpret the results knowledgeably.

  • The Tools of Inventory Management Members Only Content
    Inventory management is not an isolated function. Many inventory issues are scheduling issues. Inventory is tied into the procurement cycle, and is affected by functions such as logistics and stores management. Within this greater context, there are a number of specific methods to manage and control inventories. The most prevalent are described below.


Richard Oreskovich, C.P.M.
Richard Oreskovich is the purchasing/warehouse supervisor for Tg Soda Ash, Inc. He has 16 years experience in purchasing/warehouse/inventory control in the mining industry. Previous positions include materials manager for Kerr-McGee Coal Corporation and Magma Copper Company. Mr. Oreskovich has a B.S. degree from the University of Wyoming and an MBA from the University of South Dakota.

  • Chain Store Age Executive with Shopping Center Age, December 1996, "Improved Inventory Management: The New Strategic Imperative"
  • The Ernst & Young Quality Improvement Consulting Group. Total Quality: An Executive's Guide for the 1990's, Dow Jones-Irwin, 1990
  • Fearon, Harold E.; Dobler, Donald W.; and Killen, Kenneth H. The Purchasing Handbook, Fifth edition, McGraw-Hill, Inc., 1993
  • Hough, Harry E. and Ashley, James M. Handbook of Buying and Purchasing Management, Prentice Hall, 1992
  • How Industry Buys MRO, The Editors of Purchasing Magazine, Cahners, 1992
  • Industry Week, October 7, 1996, "Supply Chain Management: Putting Management Into Warehouse Management Systems"
  • International Journal of Purchasing and Materials Management, Fall 1996, "Purchasing's Preparedness for ISO 9000 International Quality Standards"
  • Perlman, Kalman I. Purchasing and Materials Management. Probus Publishing Co., 1990
  • Purchasing, January 16, 1997, "Are Purchasers Gumming up the Supply Chain?"
  • Stevenson, William J. Production-Operations Management, Irwin, 1993
  • Trent, Robert J. and Monczka, Robert M. Purchasing and Sourcing Strategy: Trends and Implications, Center for Advanced Purchasing Studies/National Association of Purchasing Management, 1995
  • Transportation & Distribution, July 1996, "Learning from 1995's Inventory Buildup"
  • Van De Mark, R.L. Inventory Control Techniques, Van De Mark Inc.

  • Arnold, J.R. Introduction to Materials Management, Prentice Hall, 1995
  • Emmelhainz, Margaret. EDI: A Total Management Guide, Second edition, Van Nostrand Reinhold, 1993
  • Fogarty, Donald W., Blackstone, John H., and Hoffman, Thomas R., Production and Inventory Management, South-Western Publishing Co., 1991
  • Magad, Eugene L. and Amos, John M. Total Materials Management: Achieving Maximum Profits Through Materials/Logistics Operations, Chapman and Hall, 1995.
  • NAPM InfoEdge, August 1996, "Understanding Total Cost of Ownership"
  • Zenz, Gary J. Purchasing and the Management of Materials, Wiley & Sons, 1994

Information is also available from:
APICS (American Production and Inventory Control Society, Inc.)
500 West Annandale Rd., Falls Church, VA. 22046
Telephone: 800/444-2742 Fax: 703/237-8344

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