RightChain™ Planning utilizes a specialized taxonomy of nine distinct inventory types to facilitate advanced supply chain inventory modeling and optimization. These classifications are strategically grouped into three categories: Inventory by Status, Primary Inventory Types for Modeling & Optimization (also known as "inventory buckets"), and Special Inventory Types for Modeling & Optimization.

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By distinguishing between functional states—such as raw materials and work-in-process—and operational drivers—such as demand variance (Safety Stock) and production lot sizes—the framework allows for a granular analysis and optimization of inventory requirements. This systematic approach ensures that factors like in-transit stock, quality control holds, and storage capacity constraints are explicitly accounted for in the planning process.

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1. RightChain™ Inventory by Physical and Fiscal Inventory Status
This category tracks the physical transformation of products as they move through the production cycle.

 

• Raw Material Inventory (RMI): Inventory units held as raw material that have not yet been converted into work-in-process or finished goods.

• Work in Process (WIP): Inventory currently in the transition status between raw material (RMI) and finished goods (FGI).

• Finished Goods Inventory (FGI): Completed inventory in saleable form, having progressed through the raw material and work-in-process stages.

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2. Primary Inventory Types for Modeling & Optimization

Commonly referred to as "inventory buckets," these types are essential for baseline supply chain modeling and determining optimal stock levels based on production, procurement and demand patterns.

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• Lot Size Inventory (PLSI): This inventory is specifically associated with the constraints and requirements of production or procurement lot sizes.

• Pipeline Inventory (PIU): Also referred to as in-transit inventory (ITI), this represents units currently in transit within the supply chain.

• Safety Stock Inventory (SSI): This inventory is maintained to account for expected variances in demand, specifically addressing the split between Customer and Network requirements.

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3. Special Inventory Types for Modeling & Optimization
These classifications account for specific operational nuances, quality requirements, and physical storage limitations.

 

• Anticipation Stock Inventory (ASI): Expected inventory held to mitigate discrepancies between demand and supply curves. 

• Quarantine Stock Inventory (QSI): The volume of inventory set aside due to specific quarantine or quality control (QC) requirements.

• Moved Inventory Units (MIU): The amount of inventory relocated to or from a specific location to account for storage capacity constraints.

 

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4. Strategic Functional Definitions
To ensure precision in planning, the following definitions serve as the foundation for the RightChain™ inventory model:

 

• Conversion Flow: The progression from RMI to WIP and finally to FGI represents the standard value-add lifecycle of a product.

• Supply Chain Logistics: PIU (Pipeline Inventory) highlights the necessity of accounting for goods that are owned but not yet physically present at a destination.

• Risk and Variance Mitigation: SSI (Safety Stock) and ASI (Anticipation Stock) function as buffers; however, they serve different purposes—one for demand uncertainty and the other for known supply/demand curve imbalances.

• Operational Constraints: QSI and MIU represent non-discretionary inventory holds and movements dictated by regulatory or physical infrastructure limitations rather than pure market demand.

 

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