Minimum Stock Levels

Overview

Holding significant quantities of  items that are not used within a reasonable time is poor business practice.

It is inefficient:-

  1. it consumes valuable and scarce cash resources that could be better deployed elsewhere.

  2. stock holdings consume TOT's infrastructure , for example, storage locations and require inventory management - putting away, stock checking etc.

 

Just in Time Philosophy

With many stock line items - such as consumables, inks, and blank garments it is much more effective to apply a just in time philosophy.  You can read more on this method on the below link: -

https://www.warehouseanywhere.com/resources/just-in-time-inventory/

With regards to inks and consumables, holding enough stock to facilitate all production for the length of time it takes to replenish stock holdings means cash and space isn’t tied up in excess stock.

 

Minimum Stock Levels

To maintain sufficient levels to allow time for restocking when a SKU is running low Minimum Stock Levels should be established on all SKUs.

This allows strokeone to hi-light those SKUs where current stock level has fallen below their minimum requirement.

 

Establishing the minimum stock holding

Using your experience and judgement: -

  1. evaluate the amount of product normally used between the ordering cycle period plus
  2. the delivery time for the product order.

 

You can then use this as the rule of thumb to set the minimum stock holding.

In addition, products that are high/frequent use, (i.e. white ink, black ink) should have a much higher minimum stock holding level that those of low/infrequent use (i.e. phosphorescent green)

 

Forecasting

The staff member  responsible for controlling stock levels must also monitor future jobs that may be for a large quantity and require a low usage product and order stock accordingly.

In other words, the minimum stock holding numbers are not fixed in stone and should be set and moreover adjusted according to current and forecasted requirements.

 

Setting Minimum Stock Holding in Strokeone

To set the minimum stock holding against any SKU is just a matter of entering that quantity (by unit of measure) into the Minimum field in the stock list: -

 

 

Identify Stock Holding Shortfalls in Strokeone

Referring to the screen-shot below: _

When the available quantity (1) of a product falls below its minimum stock amount (2), strokeone calculates a negative value for Available above minimum (3) and formats the field in Red to highlight the shortfall.

 

 

Shortfalls should therefore be actioned to restore stock levels to the minimum stock holding amount.

Important Note on Expected Amount

It is important to take into consideration the Expected amount when looking to action shortfalls. This constitutes an amount of the item on order but is not included in the calculation of Available above Minimum.
Look at the below screen-shot, for the same scenario as above, but with an ordered amount of 5 which is expected in.

Here, we can see that Available above Minimum (1) is still a negative number of -2, but it is not colour coded red, because when the Expected (2) ordered amount of 5 is included, the position would no longer be in shortfall.

Thus, when seeking to address shortfalls of a SKU, make sure you take into consideration the expected amount to ensure that you don’t order items that are not needed.