How can you manage your stockpiles efficiently?

Published on : 27 October 20212 min reading time
Stockpiles allow you to adjust the flows and control your consumption. By managing it efficiently, you make sure to have goods and materials at your disposal. You also have various supplies and intermediate products on hand. So how can you manage these reserves efficiently?

Replenishment by fixed lot

This is a method you may know as the ‘reorder point procedure. It aims at determining the date and amount ordered. A minimum stock level should be defined which triggers an order once it is reached.

With this method, you can adapt to just-in-time, irregular consumption or both. The aim of this technique is to help you limit overstocking. In addition, you can minimise the costs associated with these storages. You can use this process for perishable products as well as for expensive goods.

Note, however, that this technique requires strict management to enable you to foresee shortages. It also allow you to control the delivery time. For strategic products, it is best to set up buffer storage so that you can avoid unpleasant surprises such as supply problems or issues caused by irregular activity.

Fixed-date replenishment and calendar method

This technique, known as the replenishment method, aims to determine the order date and use the amount of products as a variable for adjustment. You need to define an order frequency and a stock level that you think is suitable; all you have to do is adjust as you go along.

This method allows you to control the amount you tie up. Hgowever, you should be careful, as this does not protect you from possible stock-outs.

The calendar method replenishes your stock in the required quantity on a fixed date. This method is expensive, but it is simple and allows you to replenish your supplies even in an emergency. This technique is used when you are in control of your business.

Drop shipping for online platforms

Drop shipping is recommended for distributors and websites. The objective is to ask suppliers to manage the stocks that belong to the customers. They must ensure deliveries after orders are placed.

There are two types of drop shipping; either the website determines the quantity to be produced, or the supplier receives the orders from the distributor to define the quantities afterwards.

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