Written by Ruvisha Pillay | Contributor: Sophie Ingram
Stocked items, non-stocked items and obsolete items are known as stocking indicators (primary classification). The below table is used to summarize the key factors which differentiate the stocking indicators from one another.
Stocked item: these items you want to have readily available on the shelf for customers to order. A common stocked item would be an everyday item like dishwashing soap or toilet paper. Because these items need to be available on the shelf, you would require a forecast for it, a replenishment cycle, a target fill rate, lead time and safety stock. These factors will be used to determine what your recommended order should ultimately be in order to have sufficient stock on hand.
Non-stocked: these items may be an expensive and/or unique item that you do not wish to keep on hand, but rather order when there is demand. For example, an expensive glass table with gold trimming which you procure from one of your elite suppliers. A customer might see it in your store brochure and place an order for it, and you can then order that stock to arrive at your store for the customer to collect at a later stage. Non-stocked items will not need a forecast or safety stock because you will only replenish this item for firm demand.
Obsolete: these items are items which you will not replenish at all and will not need safety stock. An example is a shampoo bottle with an old design on the packaging. There are shampoo bottles with the new design available on the shelf due to an innovation at your company. You would not order more stock of the old design which needs to be run down and replaced by the new design.
Deciding whether an item is stocked, non-stocked or obsolete is one of the primary business decisions that would need to be made in the app. You will need to consider your key items carefully and make sure that items are properly classified or there could be consequences down the supply chain. For example, if you were to be planning for a supermarket and you mark an everyday item like soap as obsolete, the app will then never generate order recommendations for that item. A customer may then walk into your store and not see the soap on shelf, which they would generally expect to see on shelf at a supermarket. That customer would then go to another supermarket to buy that item. Not only would you then lose this sale, but also a potentially loyal customer.
FAQs
Q: I have a customer order for 20000 units and I do not have any stock on hand. There is no recommended order on the app - why?
Please check the stocking indicator of your item. It is likely that your item has been set to Obsolete, so the app will never generate a recommended order for the item.
Q: I have a forecast for 20000 units and I do not have any stock on hand. There is no recommended order on the app - why?
Please check the stocking indicator of your item. It is likely that your item has been set to Obsolete or Non-stocked. Obsolete items will still be given a forecast to help determine when any remaining stock might run to zero if naturally sold through. The app will never generate a recommended order for an Obsolete item, and it will only generate a recommended order for firm demand for a Non-stocked item.