Before Reordering, Find Out What the Other Warehouse Can Spare
A warehouse runs out of a product just as customer orders start to build. Its replenishment system proposes buying more, even though the same item is sitting in stores elsewhere in the network. On paper, a transfer seems obvious: the business has already paid for the stock, and moving it may be quicker than waiting for a supplier. But the stores may have orders of their own, and the stock still has to be picked, transported and received before it can fill the warehouse’s orders. The decision turns on how many units can be released without creating another shortage, and whether they can reach the destination while they are still useful.
Youri Moskovic, founder and CEO of Prediko, described one retailer with roughly 1,000 units across two stores against about 217 units of expected demand over 75 days. An empty warehouse was still prompting a reorder. “Transfer existing surplus when it is cheaper and faster and leaves the source location covered,” he told The Supply Chainer. Moskovic did not name the retailer or disclose the order value, so the example illustrates how a reorder can miss stock elsewhere in the network without establishing the savings from moving it.
Work out what the origin can release
The first deduction is stock already committed to customers. The next is the inventory the origin needs to serve its own demand until it can replenish, including online orders it fulfils for other locations. The remaining balance is what planners can consider moving. A central warehouse also needs to plan for the stores it regularly supplies. Moskovic described a retailer whose central warehouse was buying too little because one store’s demand did not feed into its purchase plan.
That protection depends on reliable allocation records. Neil Midgley, director of operations at fulfilmentcrowd, described how his team handles competing demand from business and consumer orders in earlier coverage by The Supply Chainer. “An effective safeguard we have in place is a single, accurate view of available inventory, supported by clear allocation rules and real-time updates,” he said. Midgley was discussing orders sharing one pool of stock. The same discipline helps a planner see whether a unit at another site is truly available or already needed for a customer commitment.
Compare cost and arrival time together
The cost of a new order starts with the supplier’s landed price, minimum order and pack sizes. A transfer brings freight and handling costs and can take up space at the receiving site. Moskovic also points to invoicing when the locations belong to different legal entities. Each option needs a credible date for when the stock will be available to pick at the destination. A transfer that misses the start of a promotion can leave the business paying to move inventory that could still have sold at the origin.
Give someone authority to release the move
Near a promotion or delivery cutoff, Moskovic recommends letting software propose the transfer and having a named person release it. The approver needs to see when the units will arrive, which quantities are already committed or in transit, and what stock will remain at the origin. If several locations need the same units, allocation should reflect demand rather than the order in which requests came in. A supplier order remains the better option when the network cannot spare enough units or the transfer will not cover demand through the supplier’s lead time.
