How do you avoid paying twice for the same peak-season contingency?
If purchasing adds inventory and logistics buys faster transport, how do you check whether both buffers are still needed?
All questionsLogistics
8 replies
- Put both decisions against the same stockout calculation. If faster transport closes the gap, the extra inventory may be unnecessary, or the other way around.
- I'd list who owns each buffer and its expiry date. Otherwise one team sees a temporary fix while another quietly builds it into the annual plan.
- Use the customer need date as the common reference. Production, procurement and freight teams often work from different dates without realizing it.
- A small joint review before approving an expedite is probably enough. You don't need a huge process, just visibility of stock on hand and inbound orders.
- Remember that the buffers cover different risks sometimes. More stock may protect against demand spikes while faster transport only fixes one late order.
- Show the cost of carrying the extra stock alongside the transport premium. That makes the trade-off concrete for people who don't work in logistics every day.
- I'd also check whether both actions are already irreversible. Once inventory is produced and air space is committed, the useful question becomes what you can change next time.
- Afterward, review the decision with the information available at the time. Nobody learns much from simply pointing out that the delay turned out shorter than expected.
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