Reorder point procedure
This post is also available in: Deutsch (German)
Goods are fed from the main warehouse to the picking area manually, as a precaution or on demand. Depending on which criterion drives the replenishment, either the reorder point procedure, the staging procedure or the cycle time procedure is created. A characteristic of the reorder point procedure is the inventory dependency.
Basic principle of the reorder point procedure
When a requirement message is received, the system checks whether the reorder level is undershot by this requirement posting.
The reorder point procedure contains two replenishment options in case of reaching or falling below the reorder point.
- Order point-dependent individual planning: When the reorder point is reached, an optimal replenishment quantity is ordered. The replenishment order of each item is independent of the replenishment requirements of other items.
- Order point dependent collective reorder point: If the reorder level of an article is reached, a check of all articles of the same delivery point is carried out. This checks whether the difference between the current target stock and the actual stock is greater than the minimum replenishment quantity. A collective order is then triggered in the amount of the target stock difference.
Compared to the supply method and the cycle time method, the advantageis the optimal stock level. Disadvantagesare the difficult replenishment coordination and the partially delayed replenishment time.
More information about possible replenishment methods can be found under cycle time methods.
Image source: © Monkey Business – Fotolia.com