Should Branch Managers Replenish Stock?

I worked with a distributor last week that had over 100 locations selling directly to end users. Despite the fact that over 35% of the distributor’s inventory (based on value) was in excess of a one-year supply and that most locations were experiencing frequent stock...

Base Your Purchasing Decisions on a Landed Cost

A vendor’s quoted price of an item is commonly referred to as the “replacement cost”.  Many organizations make the mistake of basing their purchasing decisions and profitability analysis on this amount.  But, in many cases, other costs are incurred when buying a...

Evaluating New Technology

On an average workday, I receive five to 10 emails advertising a new technology.  Each of these “revolutionary advances” promises to: Lower operating costs Increase sales Improve profitability How do you decide which of these opportunities is a worthwhile investment? ...

Average vs Anticipated Lead Times

Maintaining a high level of customer service is primarily dependent on when you reorder a product.  For example, let’s say you sell two pieces of a product per day, and the item has a seven-day lead time.  That is, it takes seven days to receive a product once it has...

What Your Buyers Should be Doing – Part V

Determine the Best Forecast Formula Last month, we discussed the fact that a single forecast formula will not accurately predict future usage for all your stocked products.  But how do you determine the best forecast formula to use for each item? We have found that...