Managing inventory is one of the most important processes in all manufacturing industries. Generally, by Pipeline Inventory consist of inventory in transit between warehouse and outlets. And Decoupling inventory consist of the inventory that is stocked for controlling the operations independently.
Inventory which is in pipeline might not be reached at the destination. In cases, if the recipient has not paid for the item it is solely the responsibility of the shipper. And if the recipient has already paid and hasn’t received it comes under the risk of them.
In some cases, the inventory can stay in the pipeline if the manufacturing location and destination are in different countries. Sometimes it will take weeks or months at the hands of the wholesaler before reaching the distribution centre. And when the retailer gets the goods it comes under the responsibility of them.
Decoupled inventory should consist of inventory kept aside in case any shut down work occurs. This should take care of any cases that may block the inventory in a production line. If one set of part for a particular product runs at a faster speed it can lead to piling up of inventory. In some rare cases where the production of one part takes time, it is good to make the shipment of the large item immediately after manufacturing and later transferring the last made one and assembled at the retailer’s location.