Pipeline inventory, also known as pipeline stock,is used to refer to those goods that have left firms warehouse but are still in company’s distribution chain as they are yet to be bought by ultimate consumer. This concept is similar to work in progress inventory where the product is still under production whereas in pipeline inventory the finished product is still under the process of delivery.
Pipeline inventory is all the items that are in-transit between the different locations of a supply chain. Maybe the inventory is on its way to a factory from a large distributor, where it will turn into finished goods inventory. Or it may be on its way from a factory to a retailer to become merchandise inventory. Point is, all pipeline inventory has yet to reach its final destination.
Pipeline stock shows up commonly in two contexts:
- Manufacturing operations that oversee supply chains with numerous factories and suppliers; especially complicated supply chains that involve overseas shipment
- Retail companies with physical locations that receive inventory from warehouses