How Stock Ordering Works In Navigator

Managing parts stock ordering effectively is crucial for maintaining an efficient inventory, reducing excess stock costs, and ensuring that the right parts are available when needed. The goal is to strike a balance between minimising stock value while maximising availability on the first pick.

Navigator offers an automated stock ordering solution that, when set up correctly, simplifies replenishment and ensures optimal stock levels. This guide explains the key concepts, setup process, and best practices for leveraging Navigator’s automated stock ordering system.

Key Concepts of Stock Ordering

Navigator’s stock ordering system operates on the principle of maintaining minimum and maximum stock levels for each part. Instead of ordering every sold part individually, the system allows stock levels to deplete to a minimum before replenishing up to a set maximum. This approach prevents unnecessary ordering while ensuring sufficient availability.

The system categorises parts based on:

• Annual Sales – The more a part sells, the more should be stocked. However, faster-moving parts require relatively less stock compared to total annual sales.

• Cost Price – Lower-cost parts may be stocked even if they sell infrequently, while high-cost parts require careful stock consideration.

• Age of Part – Newly introduced parts may not sell immediately but might see increased demand after some time. The system can be adjusted to respond dynamically to newer parts’ movements.

Setting Up Stock Ordering in Navigator

A successful stock ordering setup relies on defining reorder parameters within the system. These parameters dictate how stock levels are managed and replenished.

Defining Stock Order Parameters

Stock order parameters are based on grouping parts according to:

1. Annual sales volume

2. Cost price

3. Age since introduction

Each group is assigned a minimum and maximum stock level, expressed in terms of days’ cover. The system calculates these values using a rolling sales average over a predefined number of weeks.

Calculating Min/Max Stock Levels

1. The system analyses the past 52 weeks’ sales of each part.

2. It calculates the current replacement cost.

3. The age of the part in days is assessed.

4. The system assigns the part to the most appropriate group based on these parameters.

5. Weekly sales are averaged over the selected timeframe to determine an estimated daily sales rate.

6. This rate is multiplied by the defined minimum and maximum stocking levels to establish the ideal reorder quantities.

Example Calculation

Consider a "Fast-moving" group with sales ranging from 24 to 48 units per year:

• A part selling 24 per year, with a 16-week sales window, calculates as:

  • Daily sales rate = (24 sales / 16 weeks) ÷ (16 × 7 days) = 0.066 per day

  • Minimum stock = 0.066 × 45 days = 3 units

  • Maximum stock = 0.066 × 90 days = 6 units

• A part selling 48 per year, using the same method, results in:

  • Minimum stock = 6 units

  • Maximum stock = 12 units

This method ensures stock is replenished efficiently without over-ordering.

Best Practices and Considerations

Key Considerations

• Adjust Calculation Periods Appropriately – Slower-moving parts require a longer historical sales period to ensure accurate predictions.

• Exclude Extreme Sales Spikes – The system includes an option to remove unusually high or low sales events (e.g., bulk purchases of rare parts) from calculations.

• Iterative Fine-Tuning – It is best to start with broad stocking parameters and gradually refine them based on actual order outcomes.

Daily and Weekly Stock Ordering Routine

To maintain an optimised stock order process, follow this routine:

Daily Tasks

1. Run the stock order process.

2. Remove parts without a bin location (Navigator provides an option for this).

3. Review and submit the order.

Weekly Tasks

1. Review all parts without a bin location.

2. Determine if they should be stocked.

3. Assign bin locations to parts that should be included in future orders.