Reorder point automation: never stop for missing material
The reorder point is average daily usage × supplier lead time + safety stock. When stock falls below it, an automation can alert purchasing, request quotes from approved suppliers and prepare the purchase order for approval. Reviewing usage and lead times monthly keeps the numbers right as demand changes.
Guilherme Rodrigues ItinoseUpdated 2 min read
Key takeaways
- Reorder point = daily usage × lead time + safety stock.
- Safety stock covers variation in usage and in supplier delivery.
- Automate the alert and the quote request; keep human approval.
- Update usage and lead time regularly.
- Start with the materials whose shortage stops production.
A machine stopped for missing bar stock is one of the most frustrating losses: the order, the program and the operator are ready, the material is not.
The calculation
Reorder point = average daily usage × lead time (days) + safety stock
Example: a plant uses 6 m of Ø40 bar per day, the supplier delivers in 3 days and the team wants 7 m of safety stock. Reorder point = 6 × 3 + 7 = 25 m.
Automate the loop
- Stock updates from the ERP or inventory sheet.
- Below 25 m, purchasing gets an alert with usage trend.
- Quote requests go to two or three approved suppliers.
- The best quote is prepared as a purchase order.
- A person approves; the PO is sent.
| Item | Usage/day | Lead time | Safety | Reorder point |
|---|---|---|---|---|
| Bar Ø40 4140 | 6 m | 3 days | 7 m | 25 m |
| Insert CNMG 120408 | 12 pcs | 5 days | 20 pcs | 80 pcs |
| Coolant concentrate | 2 L | 7 days | 6 L | 20 L |
Keep it honest
Inventory accuracy is the weak point. Regular counts of critical items and recording consumption at the source make the automation reliable.
We build stock alerts and purchasing workflows around your ERP or spreadsheets. See automation and AI.
When to outsource this
- Production has stopped waiting for raw material
- Purchasing works from memory and urgent calls
When not to
- Materials are bought only per order with no stock
FAQ
How much safety stock?
Enough to cover realistic variation in usage and delivery. A simple start is the usage during the typical delay you have seen from the supplier.
Where does stock data come from?
From the ERP or inventory spreadsheet. Accuracy matters more than the tool.
Can the system buy by itself?
It can prepare the order and even send it, but most companies keep an approval step for cost control.
What about seasonal demand?
Recalculate usage by period or use a moving average so the reorder point follows demand.
Send us one drawing
We return a review with issues found, suggested fixes and a fixed-price scope.
