Many purchasing teams plan orders from today's stock. For local goods that arrive within a week, that works. For imports that land two or three months from now, today's stock means very little. What decides it is how much stock is left when the shipment arrives.
The solutionFactory orders from real salesSee how it worksWhy today's stock misleads you
Say you have 300 two-door fridges in stock and sell about 100 a month. It looks safe: three months of stock. But if today's order only lands in three months, you run out exactly as the goods arrive, or sooner if sales pick up even slightly.
The opposite happens too: an item that looks low may be fine, because a shipment is already on its way.
The simple formula
For every item:
- Stock on arrival = stock now + shipments already ordered − (monthly sales × months until the shipment lands)
- Months of stock on arrival = stock on arrival ÷ monthly sales
The second number is the one you compare with your safe band.
Set a safe band, in months
Express the safe band in months of stock rather than units, so one rule works for every item. For example: at least 0.8 months when the shipment lands, at most 2.5 months. Below the band you risk running out. Above it, your money sits in the warehouse.
Fast sellers, or items that are hard to replace, usually get a higher lower limit.
Which sales average?
A 12-month average is calmer through busy and quiet months. A 6-month average catches trends sooner. For new items without a year of history, use what you have and flag them for a manual check.
From months of stock to an order quantity
Order quantity = (target months of stock × monthly sales) − stock on arrival
Then round to cartons, pallets or container capacity. If several items from the same factory ship together, work them out at the same time so the container is full.
Worked out for every item, every week. In Excel this is usually done factory by factory and takes hours. In the Order Projection app, stock on arrival, the safe band and the suggested quantity are worked out for every item from real sales, and the purchasing team only checks and approves.
If this calculation still happens in Excel outside your ERP, read when it makes sense to use a custom app alongside your ERP.