Publishing a Revised Edition · 4
Preface to the First Edition · 6

Chapter 1: Shortages and Excess Inventory · 15

1.1 Different Appearances of Inventory · 16
1.2 The Pros and Cons of Inventory · 19
1.3 Out-of-stock and Excess Inventory · 21
1.4 Shortages and Excess Inventory of Distributed Products · 23
1.5 Factory Finished Goods Shortages and Excess Inventory · 27
1.6 Stockpiles and Excess Inventory · 31
1.7 Eliminating defects increases profits by more than fivefold · 35
1.8 Optimal inventory management to reduce both shortages and excess inventory · 39

Chapter 2: Approaches to Inventory Management · 43

2.1 Inventory Management: What Are the Challenges? · 44
2.2 Solving the "Inventory Dilemma" · 48
2.3 Don't rely on demand forecasting · 51
2.4 'Inventory Turnover' Is Not a Solution, Just a Goal · 55
2.5 Replenishment System to Solve the "Inventory Dilemma" · 57
2.6 On-site inventory replenishment systems · 60
2.7 The supplementary system operates supply chain management (SCM) · 63
2.8 The supplementary system revives ERP · 69

Chapter 3: Understanding the Supplemental System · 75

3.1 What is a supplement system? · 76
3.2 Target Inventory System · 80
3.3 The target inventory system links sales, distribution, production, and purchasing. · 85
3.4 The target inventory system is a pull system · 91
3.5 Order Point System · 94
3.6 The order point system is a push-out system · 99
3.7 Which supplement system should I use? · 102

Chapter 4: Designing a Supplementary System · 107

4.1 The supplementary period is important · 108
4.2 Setting Target Inventory · 113
4.3 Lowering target inventory by shortening the replenishment period · 119
4.4 How to Shorten the Supplementation Period · 123
4.5 Service Level and Safety Stock · 127
4.6 Reduce safety stock with integrated management · 130
4.7 The "Inventory Dilemma" is Resolved · 134
4.8 Design of the Order Point System · 136

Chapter 5: Operation of the Supplemental System · 141

5.1 Adjusting Target Inventory · 142
5.2 Buffer Management for System Operation · 146
5.3 Buffer Management Example · 150
5.4 Dynamic Buffer Management · 154
5.5 Implementing Dynamic Buffer Management · 157
5.6 Dynamic Buffer Management Practical Process · 161
5.7 Buffer Management for Long Supply Lead Times · 164
5.8 Joint Buffer Management of Warehouse Inventory and Available Inventory · 170
5.9 Buffer Management in the Order Point System · 174
5.10 Performance Indicators for the Supplementary System · 178

Chapter 6: Utilizing the Supplemental System · 185

6.1 The Role of Target Inventory Systems in Supply Chain Management (SCM) · 186
6.2 Using Target Inventory Systems in the Distribution Industry · 189
6.3 The Effects of Applying the Target Inventory System in the Distribution Industry · 194
6.4 The Role of Target Inventory Systems in Manufacturing · 199
6.5 Combining MRP and Target Inventory Systems · 203
6.6 Using the Replenishment System in Made-to-Order Manufacturing · 209
6.7 The Dilemma of Reserve Production · 212
6.8 From Reserve Production to Available Production · 216
6.9 Implementation of Available Production · 220

Chapter 7: Case Studies of Using the Supplemental System · 225

7.1 Supply Chain Management (SCM) Application Cases · 226
7.2 Case Study of Establishing Available Production (MTA) · 237
7.3 Simultaneous Application of Make-to-Order (MTO) and Make-to-Avail (MTA) · 246

The concept of economy began with the birth of mankind.
After the hunting period, self-sufficiency began, and after self-sufficiency stabilized, the period of barter arrived.
After this period, the concept of manufacturing was formed, and with the emergence of currency, manufacturing developed rapidly.
'Inventory management', a concept that emerged and developed simultaneously with the development of manufacturing and the birth of companies, has a very long history and has become an essential element in corporate management. As the development of a company is directly related to the development of 'inventory management', it is a theory that has been studied and established for a long time.


Recently, several issues in corporate management have emerged.
Among these, the 4th Industrial Revolution, smart factories, artificial intelligence (AI), and digital transformation (DX) are already commonplace to us.
In line with the ever-evolving business environment, inventory management continues to evolve.
In this situation, a book dealing with 'inventory management' appeared in a new form.
The 『Revised Edition TOC Inventory Management』 introduced here is that.

In fact, this 『Revised Edition TOC Inventory Management』 is a new book based on 『TOC Inventory Management』, the first edition of which was published in 2013.
『TOC Inventory Management』 has already been of great help to practitioners and managers in the production/distribution field in the practical aspects of 'inventory management', and has been used as a textbook for industrial engineering and business administration production management courses at universities.
This book, which has contributed significantly to the development of our company, has been republished in a new form, with content strengthened and added to address emerging corporate management issues.

The author has organized this book into a total of seven chapters.
Chapter 1 is about shortages and excess inventory, Chapter 2 is about the approach to inventory management, Chapter 3 is about understanding the replenishment system, Chapter 4 is about designing the replenishment system, Chapter 5 is about operating the replenishment system, Chapter 6 is about utilizing the replenishment system, and finally Chapter 7 is about examples of utilizing the replenishment system.
As you can see from the structure of the chapter, it starts with the necessity of inventory management, and then goes on to explain the system, how to design it, and finally how to actually use it, in a systematic way that even beginners can understand.
Furthermore, the explanation of each item is not simply limited to text, but provides relevant examples related to the item and makes maximum use of various graphs and diagrams to provide the maximum amount of information the book can provide, making the reader feel as if they are sitting in a lecture hall.


In a corporate management environment that is still evolving rapidly, a book that has been consistently helpful to practitioners, managers, and aspiring managers for over a decade has been published to keep pace with the new era and environment.
As with the first edition, this revised edition covers the fundamentals of inventory management from start to finish, making it the ultimate guide for anyone studying or working in the industry.