Friday, November 16, 2012

How to handle a hog?

Don't let one customer ruin your service levels  

Ok so this post has nothing to do with livestock but the idea is fairly simple, as a distributor your customers expect a level of service from you. For example they expect that when they call for those standard items they need every week,  you will never be out of stock. So you use your inventory management modules and configure usage patterns and do your ABC analysis, but then you have a customer who completely wipes you out of an everyday item. 

This just causes headaches on your purchasing side and while sales might be happy initially in the long term it may just cause you to over order on your next purchasing cycle , mostly because it's a one time buy and not a new trend.

So how do you handle these inventory hogs?

The MDS System allows for a no wipe out flag. This will limit the amount of inventory any one sales order or customer is able to order. At the point of entry the operator is warned and advised of the percentage the company has made as business rulle. In our example below, no one order or customer can wipe out more then 75% of the total inventory we have on hand for an item. By advising your customers you can get the extra goods but not all of if right now you are able to maintain the optimum inventory levels and can ship a partial amount to the customer while back ordering the rest allowing your purchasing department to source the additional quantity without effecting fill rates and service levels.

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to
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