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Thank you for the invitation,
Actually it is very important question and the answer should contain the following factors :
Inventory on hand
Sales Analyst
Lead time of the item
set Safety Stock or Reorder Stock
This can be analysed quarterly or once a year; most manufacturers do this once a year and have Blanket PO's put in place. You always need to keep in mind what the order qty's are from a vendor and where the vendor is located... therefore it is important to have a correct lead and restock time
That's a good question before I answer, I need some clarification like which sector do you work for ?example manufacturing, Retail, Trading, and also what method do you follow for inventory for some of the stocks we follow fixed period system[FPS] i.e, your ordering depends on the time period and for most of the items we follow fixed quantity system[FQS] i.e, our replenishment depends on the quantity.
in FQS the factor also depends on which method we use like Economic Order Quantity [EOQ] through which we identify the optimal ordering quantity. let say the the annual demand is0 i can't order all the0 at the beginning of the year now I split this into optimal quantity with least cost. now i decide my Re order Point - the frequency of order
so to decide the replenishment it has so many dependent factors
in general i can give you a few but its always better to identify the above mentioned
1. Stock on Hand
2. Safety Stock Levels
3. Delivery Lead Time
4. Daily Consumption [Fast moving / Slow moving]
5. Annual demand
6. Seasonality of Product
7. Reorder Point Level
8. Sales Forecast
9. Production Plan and Manufacturing approach
. Goods Classification [ABC]
. Process flow aspect [Job Shop / Project based / etc]
Any clarification over this please let me know it would be good healthy conversation
i should know know the slow moving items and fast moving items so that i know what im going to order how often.
- Quality
- Cost
- The movement of your goods. ( comparing between the goods, so that you can evaluate which has a good impact in the market)
- Inventory Report like stock on hand
- Reorder Point (ROP) = Lead time + safety stock
- Replenishment
Consider classifying your inventory in ABC analysis
Factors to consider before replenishment -
1. Sales Forecast
2. On hand inventory
3. Lead times for delivery
4. Cost
Current and forecasted sales will be an important factor before replensishment to avoid over stock. Sales will also provide insight on space in the warehouse to accomodate inbounding.
I am a sports retailer, where pre-booking of orders are done at least 6 months in advance before each season. In sports & fashion retail, replenishment of inventory is indeed a tough job as it is highly likely that you may not find an item available with the vendor when you re-order. Moreover, if you are lucky and manage to get your inventory replenished with the required articles, you risk of letting the inventory sit on shelves as in each season over 80% of articles are changed and different than previous season collection. Here you get to order just 2 or 4 times per year only; Spring/Summer and Fall Winter with most of the brands. However, generally speaking,
However, generally speaking, following should be considered and based on it, one should determine as to how many times he/she needs to re-order the inventory:
1) Available Inventory & Compare against the sales plan. Go for replenishment if you have done better than your plan.
2) Inventory turn rate and accordingly decide the no of months/days of the required inventory you would need.
3) Shelf life
4) Delivery Lead time, ensure re-order doesn't come late or at the time when season/style is either about to change etc...
1-Check with the requested dept.the urgent of the requested items .
2-Review the last orders of the same requested item & delivery time to inform the request dept. the min. time goods will arrive in case of urgent matters.
3-min. qtys. used over the year
seting of minimum and maxmam level of your inventory
