Am I better off ordering more stock than moving any excess stock from one warehouse to another?

Well it depends …

Where you order from depends on the merits of each case:

• If you have one years stock stuck in a warehouse but the total stock valuation is only worth $0.50 (it might be a very cheap o-ring, for example), then it is probably not worth bothering to move the stock at all. Picking, shipping and putting the stock away in the new location may just not be justified.
• If on the other hand for a rather costly product from one warehouse demand has evaporated then it will probably make very good economic sense to move the stock to fulfil a need elsewhere.
• If stock is currently in excess (say three months over-stocked) then it might not make much sense at all to move it. It will only have to be reordered sooner anyway and the three months of excess will eventually run down, and might well save the cost of an order.

Daily monitoring and management of excess

Realistically it is impossible to make forecasts perfect and you can never carry enough stock to cover every eventuality. You will lose customers from time to time. New products will take off faster than you anticipated. Poor disciplines also may lead to staff over-ordering. When they need two, they order ten. The price was difficult to resist. You will from time to time have pockets of excess stock.

micq-if recognises this certainty. Every night it can check the stock holding for every warehouse holding the product. This can be compared with the forecast and forward orders need for that stock. Where new stock is to be ordered externally it can evaluate whether that is the most appropriate decision by considering:

• the relative cost of purchasing versus raising an order to ‘move the excess’.
• the transport costs from one warehouse to another, and
• the cost of continuing to carry the stock in the location that has the excess.

This can all be being checked while you sleep. Hundreds of business cases can be raised and evaluated. If they are worth doing, next morning you will have a recommendation to move the excess rather order externally, if that is the most appropriate decision ... you just need to set the rules.