When to restock your inventory; the art of inventory management
It is one of the most infuriating moments in an herbalists day. You go to grab an ingredient off the shelf and find it almost empty. Crud. You are almost out of the product and now you don't have enough ingredients to make more. Bloody hell, now what?
Having just what you need on hand when you need it is part science, part art. However, there are some tips that will help make the process easier. First off, you need to determine how long it takes you to make the product. That may range anywhere from a few hours to several weeks depending on what you are making and your resources.
Secondly, you need to determine how long it takes for you to get the ingredients for the product. If you have them shipped it will take more time than if you go to a retail store to purchase them or if you yank them out of your own backyard.
Next you take the time it takes to make the product and you add it to the time it takes for you to get the ingredients. This is called your lead time. It is the amount of time it takes to get the product on the shelf from the moment you order the ingredients to make it.
Determining your lead time is the science part. The next step is where the art comes in. You need to figure out how much of your ingredients you use over the lead time. This amount will be your trigger for the restock process or your Restock Point. When you first start making products, you won't have a sales history to rely on and competitors often aren't willing to share theirs so you will have to do a bit of guessing to determine this number. When you do, err on the side of over rather than under estimating.
Once you know your Restock Point, record it with your inventory information for that item. Of course Kerrii makes this easy by giving you a Restock Point field for every inventory item. However, you can also record this information on a spreadsheet along with your other inventory information if you aren't quite ready to start using Kerrii.
Once you have the Restock Point recorded, when your quantities reach that amount you know it is time to start the restock process. Easy peasy, no more getting caught without inventory on hand.
So how does this work in a real life scenario? Let's use one of my products as an example. I make a Rose Elixir. I use honey, brandy and rose petals to make it. It takes a day to get the honey and brandy and two weeks to get the rose petals. I let the elixir sit for 8 weeks. So my lead time for my Rose Elixir is two weeks plus 8 weeks or 10 weeks in total. In those 10 weeks I sell 20 bottles. So my Restock Point to begin restocking Rose Elixir is 20 bottles. I put that into Kerrii or my spreadsheet. I check it once a week and when I see my Rose Elixir is down to 20 bottles, I start the process of making more. I am never without Rose Elixir on my shelf again.