Should a small importer hold more safety stock during route disruption?
How would you add a buffer without tying up cash in products that already sell slowly?
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8 replies
- I'd start with the items that have both uneven replenishment and a painful stockout. Applying the same extra weeks to every SKU usually creates a lot of sleepy inventory. A simple first pass is to put products into a few groups: essential fast movers, replaceable items and slow or seasonal stock. You can then discuss a different buffer for each group instead of arguing over one company-wide number that fits none of them particularly well.
- Separate supplier production variation from transport variation. Otherwise you may blame the vessel for a problem that really starts before the goods are packed.
- Use recent actual receipt dates for the lane, then look at the slower cases as well as the average. An average can hide the delays you are trying to cover.
- Cash availability should be part of the discussion from the start. A buffer that makes the next supplier payment difficult isn't much of a safety net.
- For short shelf-life stock, I'd lean toward smaller, more frequent replenishment if transport options allow it. Extra inventory can become a write-off very quickly.
- A backup supplier only helps if the product is already approved. I'd count qualification time in the plan instead of treating an untested quote as immediate capacity.
- Pick a review date when you add the buffer. Temporary disruption stock has a habit of becoming permanent because nobody owns the decision to reduce it.
- Don't forget open purchase orders already in transit. Before buying more, lay out what arrives when and which customer demand is already covered.
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