| If you manage thousands of stock lines you will | | | | an issue in that the different departments within our |
| appreciate that there can be a huge challenge not | | | | client required us to store their stock for them. |
| only keeping up with popular stock lines but also | | | | Sometimes they like to dump really old literature on |
| dealing with the least popular items. In order to | | | | us which was outdated. Because they are politically |
| address this in my business we created an amazing | | | | motivated they would rather leave it in stores than |
| tool called the LOS (Life of Stock) report. | | | | recycle it, essentially because they do not want |
| We look after several thousand product lines for | | | | anyone to ask why they are destroying pallets of |
| clients, mainly literature for an information agency | | | | stock paid for by the taxpaying public. However this |
| that is owned and run by the government. My job | | | | is inefficient and we needed to find a lever to get |
| includes ensuring that we keep in stock hundreds of | | | | them to act. |
| popular lines that can be called off at any point. | | | | With this in mind a couple of years ago we came up |
| In order to do this we need to be able to forecast | | | | with a very interesting remedy. Using the same |
| demand for these fast moving items. Now of course | | | | formula to calculate demand for fast moving items i.e. |
| the simplest way to do this is to look at demand for | | | | number of items in stock divided by average monthly |
| the previous 12 months and come up with an | | | | demand we where able to create a figure which we |
| average figure by month. So here is a nice and simple | | | | referred to as the life of stock. The results where |
| example if 12000 items of literature where called off | | | | amazing, some titles we where holding based on |
| over a 12 month period then monthly demand would | | | | current demand would be in stock for THOUSANDS |
| be 1000 items a month. In our business we set a | | | | of years, in fact the worse case scenario was 22,000 |
| reprint trigger at 3 months and would notify our client | | | | years. Now this was even more embarrassing for |
| in this instance when they had 3000 items left that a | | | | some of our client agencies and they immediately |
| reprint is required. | | | | instructed us to begin recycling lots of dead titles. |
| The reason why I am explaining this to you is | | | | The end result is that our warehouse runs far more |
| because quite simply we adapted this same report to | | | | efficiently as we have room to manage live titles |
| deal with very slow moving items. You see we had | | | | more effectively. |