Skip to main content
All CollectionsGetting StartedFAQ
Basics of Planning and Ordering
Basics of Planning and Ordering

Get started by learning about the industry standards on ordering and planning

Anya Bacon avatar
Written by Anya Bacon
Updated over a week ago

Planning and Ordering stock correctly is both art and a science. 🧑‍🎨🧪

And we are here to make it easier for you - so let's make sure we are on the same page as we get started.

Vocabulary

  • Lead Time: the amount of time it takes between placing an order with the Supplier and receiving it In Stock in a warehouse

  • Days of Cover: the number of days of demand you wish to hold In Stock on delivery. e.g. 10 days on hand means, your stock will last for 10 days

  • Days Left: how many days will it take you to sell through current stock.

👆Note: when you are requesting Days of Cover, as a range on Prediko, this corresponds to how many days of demand you wish to hold In Stock on delivery.

💭A range of 5-30 days means: when raising an order the recommended number of units to order will last 30 days after delivery. And Prediko will let you know when next to order to never have less than 5 days on hand. See more about this below

How far in advance should I plan?

❕At a minimum, you should plan for the period of Lead Time plus the Days of Cover

💭Supplier delivers orders in 30 days (Lead Time) and if you wish to hold 60 days' worth of stock (Days of Cover) - then you should plan for a min of 90 days = 60 + 30

👆Note: If you plan for a smaller period, let's say 50 days, then you are effectively only planning for 20 days out of 60 that you wish to have on hand. How can you then ensure you are ordering enough if your plan hasn't covered that period?

When should I order and how much?

If you have 0 units in stock...

❕Order immediately and enough to meet the demand for the period of time after you receive the stock (Lead Time) given how many days In Stock you wish to have (Days On Hand).

👆Note: Think about it, whilst you wait for the product to be delivered, it almost doesn't matter what is the demand for it - you don't yet have the product on hand to fulfill it. But once you receive it, order for the number of days you wish to have in stock then. See the diagram below:

💭 Today is the 1st of January, you know it takes you 1 month to get the delivery from a Supplier and you want to hold 2 months' worth of stock (60 days left). Then you should order for the 1st of February to the 31st of March demand and place an order immediately

If you have some units in stock already...

❕As you plan demand for the period of Lead Time plus Days Left, check if what you have In Stock covers this demand.

Beware though, if the units In Stock don't cover the demand of the period of Lead Time - then only order for the Days Left period as above.

💭 You sell 10 units per day and currently have 50 units in stock, enough to last you 5 days. Lead Time is 10 days and the requested days left is 30 days.

You should order 10x30 = 300 units, as your current Units In Stock will only cover 5 days out of 10 days of Lead Time

What are the product Health Statuses?

Excess = the number of Days Left of the product is greater than the defined range

Healthy = at delivery, you are within the Days Cover range - no need to order more units now

At Risk = at delivery, you will have less than Safety Stock days

Stockout = you have 0 units in stock

What makes my product 'Healthy'?

If your Product, has Days Left within the range you set as "Requested", we will consider it 'Healthy'.

💭 If you sell 10 units per day, holding 100 units on hand (lasting you 10 days) and your "Requested" days of cover range is 5-30 days, the status of the Product is "Healthy". As it is within days of cover.

👆Note: We may still tell you to "Buy Now", even if the product is Healthy now, as it may not be healthy at next delivery. Check here for more details: LINK.

How does Prediko help me?

We really take all the grunt work and mathematical guesswork out of it. 💪

No chasing inventory levels. No VLOOKUP and confusing excel sheets. No going through email to remember the agreed terms.

Simply set up your account and get immediate recommendations, which are always up to date.

🌟What we offer 🌟

  • Live tracking of inventory - what you have In Stock and In Transit

  • Centralised information about your Suppliers - Lead Time

  • Per Product view of Days Cover

  • Planning ahead, to ensure you always cover the correct period

  • Notify when to order to never have less stock than you expect

  • Auto recommendations to order on the Product and SKU level

Did this answer your question?