For our scheduled customers; who provide forecasted usages of their parts, we have to carefully calculate minimum stock levels to ensure we have enough stock on hand to meet the monthly and weekly requirements.
In most cases; these scheduled parts are manufactured in Asia, so we have stock at varying stages of availability to meet the forecasted demands:
- In stock at our UK HQ
- Already on route to us via sea/air freight
- Stock manufactured and held at our Asia facilities
- Stock in production
A Working Example:
We manufacture this simple brass connector for a boiler manufacturer:
As this item forms part of a full boiler assembly; the forecasted usage changes dependant on the stock and availability of other items making up the assembly, such as circuit boards/PCBs; sheet metal work etc.
The current forecasted usage of this part is:
|
Month |
Total QTY |
|
March |
3,600 |
|
April |
2,600 |
| May |
2,600 |
As a general rule, we hold 8 weeks’ worth of minimum/buffer stock; based on 12 weeks’ worth of forecasted usage.
Based on the above; the average weekly usage of this item would be 734 pieces.
(Total of 8,800 divided into 12 weeks)
So, we would keep roughly 5,800 pieces in stock in the UK as the minimum level
(734 per week x 8 weeks = 5,872 pieces in total)
We would also then have parts already on the water due to come in to top up this stock again in April, May, and so on each month to ensure that the levels don’t drop below the minimum.
Unexpected Increases in Demand
We understand, particularly on assembly lines, that production levels can change at should notice and you may need to increase your forecasts.
By having the buffer stock to hand; and more already in production or complete in Asia, we can look to expedite stock to support you.
If you require more than the buffer stock, we should also be able to offer air freight on stock complete in Asia, to come over within 2 weeks.