How fast is it selling?
Use a sensible recent sales window and note promotions, seasonality or one-off orders that distort it.
Stockout prevention and overstock management
Prevent stockouts and overstock with the same planning view.
These are not opposite reporting problems. Both happen when a purchase decision is made without the complete stock position: on-hand inventory, inbound POs, sales velocity and the time it takes to replenish.
Why both risks persist
A low on-hand number can mean two very different things.
An SKU may genuinely be at risk of a stockout. Or a late but confirmed purchase order may already cover the demand period. Treating both situations as an automatic reorder creates excess inventory.
Start by estimating demand during the replenishment window. Then add the quantity already on hand to the quantity that is realistically inbound during that same period. Compare the result with expected demand and any safety stock policy.
The review sequence
Ask the same five questions for every material SKU.
How much is usable now?
Check available on-hand stock, not only a total that includes allocated or quarantined inventory.
What is already inbound?
Include open POs and their realistic arrival dates, rather than assuming every planned order is immediately usable.
Can it arrive in time?
Compare coverage with supplier lead time, internal receiving time and a reasonable safety buffer.
What decision follows?
ORDER where supply will miss demand, HOLD where coverage exists, and CLEAR where inventory is excessive or ageing.
Common purchasing traps
Do not solve a stockout by creating a clearance problem.
Reordering from a single report
On-hand data misses stock in transit. A PO report misses the stock already available. Review both before raising a new order.
Using the average without context
Average sales can be useful, but it should be checked against a known promotion, discontinuation, customer loss or season. Explain the demand assumption before ordering to it.
Ignoring product age
For shelf-life products, an apparently healthy quantity can still be excessive if velocity cannot clear it in time. Build expiry into the same review.
Keep planning practical
CALCULATOR
Estimate a reorder point
Use daily sales, lead time and a safety-stock buffer for a quick starting point.
Calculate nowGUIDE 03Review inbound inventory
Plan around purchase orders that are already on the way.
Read guideSTOCKGUARDReview a PO before approval
Check whether an incoming order creates unnecessary excess inventory.
Explore PO GuardFind the inventory decisions worth investigating.
Start with the exports you already use. The Inventory Health Check is a short discussion before any deeper data review.
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