What to check during a stockout

A customer asks for a box of 3/4 inch fittings. You walk to aisle 4. The shelf is bare. The system, when you check it, says you have 12.

Somebody is wrong, and it is not clear who. This is the moment that separates shops that run on guesses from shops that run on records. Before you place an order, spend five minutes working out which kind of empty you are looking at.

Four kinds of empty

An empty shelf has four common causes, and each one needs a different fix.

• The stock is really gone and the system knows it. Reorder.
• The stock is gone but the system still shows 12, because a receipt was entered twice or a pick was never recorded. Correct the record first, then reorder.
• The stock is somewhere else: the wrong bin, the receiving area, a cart nobody put away. Find it.
• The stock is on order and arriving this week. Wait, or chase the supplier.

Ordering before you know which one you have is how a shop ends up with two deliveries of the same thing and still nothing to sell on Friday. How to set a reorder point for an inventory item helps stop the empty shelf coming back.

Available is not the same as on hand

Some stock sits on the shelf and still is not for sale. It may be promised to another order, or set aside because it is damaged or waiting for inspection. Those are three different numbers: what is physically there (on hand), what is spoken for (reserved), and what nobody should touch (blocked).

What you can promise a customer is on hand minus reserved minus blocked. That figure is called available, and it is the one that matters at the counter. An item can show 20 on hand and still be out of stock for the person picking.

Do not reorder what is already on its way

The classic double order goes like this. Monday, Priya notices the shelf is low and emails the supplier. Tuesday, Marcus checks the stock sheet, sees the same low number, and places the same order again. The purchase order lives in an inbox, so nobody else can see it.

The fix is not a smarter person. It is one place where open orders are visible to everyone who might reorder. Before you order, look for an open purchase order for the item and read its expected date.

The fix for a double order is one place where open orders are visible.

After you find the cause

Write down what it turned out to be, even if only in a sentence. After a few weeks you will see a pattern: the same supplier shipping short, the same bin getting mixed up, the same item picked twice. The first stockout teaches you little. The fifth one points at a habit.

A worked example

Take that bare shelf of 3/4 inch fittings. The system says 12. You look: nothing on the shelf, nothing in the next bin. You open the history. Three days ago, a pick of 12 was recorded for a customer order, and then a second pick of 12 for the same order, a double entry. So the real number was 0 all along, minus nothing.

Now look at open orders. There is a purchase order for 48, expected Thursday. The right move is not to reorder. It is to correct the record, tell the customer Thursday afternoon, and move on. Total time: about six minutes. Total cost: nothing.

Without the checks, the likely outcome is a second order of 48, a customer who is told 'maybe next week,' and a Friday with 96 fittings and a shelf that has no room for them.