Keeping goods available.
WHAT TO ESTABLISH WITH A SUPPLIER
Lead times Minimum order quantities Payment terms What happens with faulty goods
LEAD TIME PLANNING
Reorder before you run out, accounting for the supplier's lead time.
That is what a low stock threshold is for.
Set the threshold at the level you sell during the lead time.
HOLDING TOO MUCH
Money sitting still, and a risk if the item stops selling.
HOLDING TOO LITTLE
Lost sales and disappointed customers.
WHAT TO TRACK
How fast each item sells How long restocking takes Which items you run out of repeatedly
FOR IMPORTED GOODS
Longer and less predictable lead times.
Plan accordingly, and hold more buffer.
FOR SEASONAL ITEMS
Order early. Suppliers run out too.
WHAT TO REVIEW
Slow-moving stock, quarterly.
Money in dead stock is money not working.
