What is Minimum Stock?
Minimum Stock is an important part of Stock Management that plays a critical role in Supply Chain is an element. It reduces the risk of being out of stock in case of demand fluctuations, malfunctions, etc. Thus, while increasing internal/external customer satisfaction, it also helps reduce purchasing costs thanks to planned purchasing.
Benefits of Minimum Stock Tracking
Prevents material and time losses that may occur due to material shortage,
Provides economy of scale and transportation savings thanks to bulk ordering,
Thanks to bulk ordering, it reduces the number of orders and eases the burden on the buyer.
Whiplash Effect reduces,
Improves relationships with internal customers.
What needs to be done to increase its benefits
Standardization should be achieved in materials.
Seasonal changes should be kept up with in a timely manner.
More precise predictions should be made with data analytics.
Minimum Stock Quantities should be updated regularly.
More accurate inventory tracking with Kanban Card to be done.
Risks of Minimum Stock Tracking
If there is too much water in the river, the irregularities in the ground may not be visible and may hide problems in consumption and order management.
Towards the end of the project or production, excess stock may occur.
Low stock turnover rate due to large purchase lots increases the cost of keeping stock.
Creates the need for additional stock space (Nebol, et al., 2014 January p. 86).
It may cause purchases of larger or smaller lots than necessary due to estimation errors.
Requires constant precise monitoring.
Minimum Stock and VMI (Vendor Managed Inventory) Comparison
How to set up Minimum Stock Tracking?
Minimum Stock Tracking items are determined.
A unique Material Code is opened for each item.
Delivery times of the materials are determined.
The usage amounts of the materials for the last 3 months are determined.
The minimum stock amount is determined accordingly.
Order blocks are agreed (For example: Minimum Stock x 2).
Minimum Stock Report is prepared and shared regularly.
Minimum Stock Quantities are checked and updated periodically according to seasonality and business status.
Slow Moving Materials Report will be drawn at regular intervals, and the effectiveness of the Minimum Stock Report is checked again.
Resources
Nebol, Erdal, Uslu, Tanyeri and Uzel, Ezgi. January 2014. Supply Chain and Logistics Management. 3. Istanbul: Beta Basım A.Ş., January 2014. s. 372. ISBN 978-605-377-055-4.
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