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Thread: Keep inventory for customer

  1. #1
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    Default Keep inventory for customer

    Hey folks,

    I would like to set up an agreement/supply chain program for key customers that is about having extra inventory to ensure availability while getting forecast information in return. Easy said, the customer says what is approx. annual demand for product X is and we agree on keeping stock just for him (so we will kind of have a sub-warehouse in our warehouse for this customer). For example I will somehow need to calculate the numbers (e.g. if the customer says he needs approx. 1000 pieces a year, we keep 20% of the annual demand always in stock for him. when he places an order, it is directly available and we will directly fill up to the 20% agreed level.) But I don't know how to calculate these numbers. How can I calculate the percentage to keep on stock?

    Thanks for any information or help!

  2. #2
    Forum Founder & Owner TopLink's Avatar
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    Default Re: Keep inventory for customer

    Sounds like a great idea, if the customer is willing to pay for it.
    Regards

    Top Link - Site Founder

  3. #3
    Silver Member Alexandoy's Avatar
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    Default Re: Keep inventory for customer

    In my retailing business of computer supplies, we had one valued customer that orders a huge volume and pays with a good check that is encashable after 30 days. To be sure that we wouldn't miss to deliver their order once or twice a month, we always keep in stock a volume that is equivalent to their monthly order. And when sometimes they order more than the stock, we promptly deliver what we have and they are amenable to our promise that the balance of their order will be delivered within a week's time. But if we have enough cash flow, perhaps I would have a stock of 2 months for the benefit of that valued customer.

  4. #4
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    Default Re: Keep inventory for customer

    The one thing that I can thank to my time in the public sector is the fact that I really do keep good records of everything, and this has translated well. I am not sure if it was fear of prosecution of just the saving my own butt thing, but I like the idea.

  5. #5
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    Default Re: Keep inventory for customer

    I think this is a great idea. I have a store where I sell tyres of all kinds. I have a customer who purchases truck and dumper tyres in big quantity. Usually, he will be buying over 50 tyres in a month. I have not set a separate warehouse for him, but I always try to make his order available. I never let my stock deplete by more than 20 percent of his demand. I also ask him to order ahead of time. This leaves me enough room to acquire stock.

  6. #6
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    Default Re: Keep inventory for customer

    Please let me know how you approach your customer to propose this idea and how receptive they are to it ... we have customers who place orders frequently for storage bins that they need shipped within 1-2 days, but some of the times the products are out of stock ... we have approached some of these customers requesting that they provide a forecast so we can always make sure to keep these items in stock, but so far they have not been receptive to the idea. we don't ask them to pay up front or anything like that, simply let us know what they plan on ordering and we'll produce excess stock, but so far, no luck so we're currently stuck scrambling whenever customers place orders that are urgent and low on stock...

    Please keep me posted with how receptive your customers are to this and i'll try and follow your guidelines... thanks!

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