Reorder decisions happen too late
Use consumption, lead time and demand to decide when to buy.
01 · What is usually happening?
Someone notices a low shelf and tells purchase, who places an order that takes the supplier's full lead time to arrive. By then the shelf is empty.
The decision was made at the moment of noticing, not at the moment the lead time required.
The question people usually ask“When should we order?”
The more useful question“What level of stock, given the lead time and use, means order now?”
02 · Common causes
- 01Reorder is based on seeing the shelf, not on cover
- 02Lead times are not known per supplier
- 03Use is not measured, so cover cannot be calculated
- 04Reorder levels were set once
- 05Purchase is told by word of mouth
- 06No buffer for supplier delay
03 · What to check now0 of 6 checked
04 · What good looks like
- 01Reorder level equals use over lead time plus a buffer.
- 02Levels are reviewed quarterly or after a big change.
- 03Cover is visible every morning.
- 04Purchase is alerted by the system or a list, not memory.
- 05Delay history sets the buffer.
05 · Where this connects
This rarely stays in one department
What it can lead to: Orders are placed after it is too late to avoid a stoppage.
Start from a problem
Work flows left to right, top to bottomKEYMost important for manufacturing
These support every part of the business
Problem
Reorder decisions happen too late
Usually connected to
How it spreads
- Inventory
What it can lead to: Orders are placed after it is too late to avoid a stoppage.
lamplamp could calculate days of cover for each critical item every morning.
08 · lamp
lamp could keep this moving
lamp is not available yet. These are things it is being built to do.
- lamp could calculate days of cover for each critical item every morning.
- lamp could draft the PO when cover falls below lead time plus buffer.
- lamp could learn actual lead times from receipts.
- lamp could suggest new reorder levels when use changes.
Does your business handle this differently?Tell us what we have missed: a cause, a check, or a better way of handling it.
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