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Dr. Warehouse – Simple Systems that work!

Easy Stock check board (for Fast sellers) for no “Out of Stock”

Hi! Welcome to ‘Simple Systems that Work’!
Systems have driven me always. I love improving existing systems and putting in new ones to make
work more efficient and simple.
Since I have started working on Systems at our company, we have implemented and improved many
systems over a period of time so that they work smoothly, helping us get more and more efficient.
I want to share with you a system we successfully follow in Stock Management.
For any company, the key challenge in Stock Management is not to run out of stock of Fast selling items.
Here is the Simple System we follow for monitoring the Stock of our Fast Selling Items for “No Out of
Stocks”.

STEP 1: IDENTIFY THE FAST SELLERS: Identify the fastest selling items among all your stock items using
the 80:20 rule. Then list down these fastest sellers (which contribute to about 80% of your sales value)
on your white board , Product Category-wise.

 

STEP 2: SET UP MINIMUM STOCK LEVELS: Next, set up Minimum Stock Levels (MS) for each of these
when you want to raise an alarm to your Sales and Purchase Teams that this item needs to be ordered.
List the Minimum Stock Levels in a separate column next to each “Fast selling” item.

 

STEP 3: CHECK ACTUAL STOCK OF FAST SELLERS: Once every week (or every fortnight) a member of your
Stores team then counts these fast selling products physically and updates the Actual Stock (AS) on
another column on this board. If the Actual Stock (AS) is greater than the Minimum Stock (MS) level you
have established he writes in in blue/black writing on the board, and If the Actual Stock (AS) is less than
the Minimum Stock (MS) he writes in Red colour to raise an alarm to all team members that the stock is
low and needs to be ordered.

 

STEP 4: CHECK INCOMING ORDERS OF FAST SELLERS: Additionally, if the Stock is OK he puts a smiley
yellow magnet (or another one that works for you) next to that stock count number and If it is Low, he
puts the red beetle (any red colour magnet) next to it.
This same stock count list is then, immediately, noted down and sent to your Purchase Team Member
who will add any incoming order quantities and date for these items, if any. He then emails it within an
hour or two for the information of your Sales Team.
This enables your Sales Team to promise customers with absolute clarity keeping in mind the clear
picture of what’s available now and what is coming in and when.
So, to summarize, the Steps are as below:
1. Identify using 80:20 rule, fast selling stock items for your board.
2. Set up Minimum stock levels for each item and list that quantity in the Minimum Stock (MS)
column on the board.
3. Monitor and update these items weekly or more often on the board using ‘Blue/Black’
handwriting to indicate ok stock with a smiley yellow magnet (for example) and ‘Red’
handwriting to indicate low stock with a red magnet for additional visual identification.
4. Purchase team to check for incoming orders for ‘Red’ or low stock items and add to the check
list and email promptly to Sales Team for re-ordering promptly, the fast selling items that are
low in stock to avoid any “Out of Stock” for them.

Now you have a complete picture: Monitor Top sellers, their stock level, their incoming orders. Do this
regularly and ensure you always have incoming orders to replenish once they reach their re-order levels.

Done!

Write to me to tell me what you think of this system at blog@printechme.com

I look forward to hearing from you! 🙂

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