The stock report answers the wrong question
Standard ERP stock reports answer "what's in the warehouse right now?" That information is necessary, but it isn't enough to make a decision. 500 units of stock is a year's supply for a product that sells 10 a week, but two and a half weeks' supply for one that sells 200 a week. If the lead time is three weeks, you are already too late to order the second product.
READERP's stock report set focuses on exactly this question: what's about to run out, and when do I need to order at the latest?
How is it calculated?
- Consumption rate: Each product's average weekly outflow is calculated from its own past movements. Not a general average, but the product's own pace.
- Weeks remaining: Stock on hand is divided by the consumption rate, showing how many weeks the stock will last.
- Lead time: The delivery time after an order is placed, for the product or the supplier, is added in.
- Latest order date: The lead time is subtracted from the weeks remaining; an order placed after that date means running out of stock.
The result is a simple table. Products whose order date has passed rise to the top, because it is already late to decide on them. Next come the "order this week" products, and the comfortable ones sit at the bottom.
Who is it important for?
- Manufacturers: If raw materials and semi-finished goods run out, the line stops. For details, see manufacturing and industry.
- Wholesale and distribution companies: Running out of stock sends dealers to competitors, while excess stock ties up cash. See wholesale and B2B distribution.
- Food and fast-moving consumer goods: For products with a shelf life, excess stock turns into waste.
The link between stock and cash
Every day goods sit in stock is money tied up. Inventory days are one of the three legs of the cash conversion cycle. The stock coverage report also shows which products you're holding more stock of than you need; that's a good starting point for reviewing your ordering policy.
Together with sales data
Because the consumption rate comes from sales movements, it is fed by the same data as revenue analysis. For seasonal products, the shape of sales across years can be seen in a single series thanks to fiscal-period merging.
E-commerce and multichannel sales
If your own site and marketplaces are fed from ERP stock, the cost of running out is higher: a product you don't have gets sold and the order is canceled. While IMFLEXI syncs ERP stock to every channel, READERP tells you in advance which product will run out and when.
Frequently asked questions
Where does it get the lead time from?
If lead time is kept on the product or supplier card in the ERP, it is read from there. If not, default lead times are defined per product group during setup.
Can it be calculated per warehouse?
Yes, if stock is kept per warehouse in the ERP; coverage can be seen separately for each warehouse.
Can the report go to the purchasing team every week?
Yes. It is sent to the purchasing team every week by scheduled email and highlights what has changed since the previous week.
To base your stock decisions on data, get in touch. General information: READERP.