Purchasing and replenishment that follows real demand

Most small warehouses reorder from memory or a spreadsheet. Someone notices a gap, checks a supplier email for the last price, and raises an order. That works until the catalog grows, lead times vary, and two people order the same SKU in the same week.

The cost shows up in two places. Too little stock means backorders and split shipments. Too much means cash sitting on pallets and, for dated goods, write-offs when stock expires. The fix is not a smarter guess. You need a clear record of what you have, what is already on order, how fast it moves and how long the supplier takes to deliver.

Purchasing starts from suppliers and their catalog. Each supplier line maps their SKU to yours and records the pack size, cost, lead time and minimum order quantity. When you raise a purchase order, those terms are already there.

• Draft the purchase order and add lines from the supplier catalog.
• If your warehouse requires approval, it waits for an approver, so spend is checked before it leaves the building.
• Send the approved order to the supplier and keep quotes or confirmations as attachments.
• Record an advance shipping notice when the supplier confirms what is on the way.
• Receive against the order. Deliveries can arrive in parts, and each one updates what is still open.

Replenishment suggestions look at recent demand and at how many days of cover each SKU has left. When cover drops below what the supplier's lead time needs, the SKU appears in the suggestion list with a proposed quantity.

A suggestion is a proposal, not an automatic order. If another of your warehouses holds spare stock, the suggestion can be a transfer instead of a purchase, which moves stock through transfers between warehouses. You release the suggestions you agree with and dismiss the rest.

For example, a SKU OIL-008 that sells 40 units a day with a 10-day supplier lead time needs at least 400 units on hand or on order to avoid running out before the delivery lands. Add a buffer for demand spikes and late trucks, and that is the level at which you want to reorder.

Not every replenishment is a purchase. Fast movers usually sit in a pick face, a forward location sized for a few hours or days of picking, with reserve stock on pallets elsewhere. Each pick face in NextStock has a minimum and a maximum. When it falls below the minimum, it needs topping up from reserve before the next pick run finds it empty.

Set the maximum to what the location physically holds and the minimum to cover at least one pick cycle. A pick face that runs empty mid-shift turns a simple pick into a search.

Real suppliers rarely deliver exactly what was ordered. Plan for these before they happen.

• Short or over deliveries are recorded as receiving variances and go for approval, instead of silently changing the order.
• Split deliveries keep the remaining quantity open on the purchase order until it arrives or is closed.
• Minimum order quantities and pack sizes mean the suggested quantity is rarely the quantity you order. Round to the supplier's terms.
• Seasonal or promotional SKUs need a person to review suggestions, because recent demand will not predict a one-off spike.

Start with your top suppliers and the SKUs that cause the most stockouts. Fill in lead times honestly, including the days a delivery waits at the dock. Set a reorder point buffer based on how variable demand and lead time really are; the free safety stock calculator gives you a starting number. Once purchase orders flow, receiving and putaway closes the loop by checking what arrived against what you ordered.