Best Posts in Thread: Reorder Point

My wife is the Procurement Officer for Noreco II Sometime ago she was held to account for overstocking the Stores, much toing and froing on the issue after many meetings she was told to go back to agreed Asset holding forecasts, She did as the Auditors said and now she tells me that she finds herself in a situation of LOW/ NO STOCK,
Damned if she did and Damned she will be when the General Manager asks WHY is there no Stock

 

Before you all get on your western high horses try actually running a business here. It is nothing like the US, EU, AU/NZ, Singapore. Yes, perhaps some suppliers dont have any inventory management but this is only a small percentage of the problem. The suppliers are often out of stock and that would lean 60/40, the 60 being out of stock. They also regularly have limited expiration dates on stock they hold so just saying buy more stock is just a rubbish money wasting statement. Major product local distributors also state they are not allocated stock they need to meet local demand. In Manila and Cebu the same distributor has stock and we have resorted to moving accounts from Negros supply to Manila which is then sea freighted here, adding cost, numerous delays which also eats into expiration margin. Also on the shipping there is close to zero customer account service with updates and ETA's. Constant calls to ask the ETA mostly go unanswered or the generic response "its at the port awaiting a ship booking". They are reliable, no breakage or missing items, but zero updates or tracking making it impossible to estimate delivery within a 2-4 week time frame. Yes you may have had one great experience with 2Go or similar getting one box here, but cost conscious local suppliers and repeatability make shippers like these unfeasible.

The complete supply chain has issues, 2 out 10 suppliers would be considered reasonable by western standards and they are Manila based suppliers who do not ship to the province. The rest are head scratches on how they remain in business yet some are 45 years old.

Negros is the "province", Wikipedia states it is a "3rd income class component city". Coupled with the logistic shipping issues (absolutely no reasonable cold chain supply avenues for small to medium business) you have a constant response of out of stock.

Perhaps moving to Manila or Cebu city is the only time you should complain and not living in a remote part of a 7000 island archipelago is best for most. All these complaints just sounds like complaining for complaining sake.

 

I must have succeeded better at this then; I often refer to our pantry as my asawa's "little sari-sari store".

 

As a former supply chain consultant my primary expertise was in MRP (material requirements planning). Reorder point was one of the keys. In the Philippines and in my house there seems to be a crazy phenomena that the reorder point is when the stock level reaches zero. When you are out of stock you might consider reordering; hence, "out of stock" once again. I give up, my consultation doesn't work at home.

 

There is more to having stocks at home merely than the problem of not having something at hand you desire.

Firstly there is the issue of a natural disaster, which could disrupt food supplies for some time - for that reason it is best to have canned or dried goods at hand to last a few weeks or more. I also have water-purification tablets that will serve to protect me and 'her indoors' should there be a water supply failure. They could be used if we have no choice but to drink faucet (tap) water or, in extremis, going to the local river (having first filtered out the toilet paper, etc!).

Secondly, having food stocks can be a cost-saver due to rampant inflation - what you have in stock will probably be much more expensive in the future. I am sure it is better than paltry bank interest.

It is also worthwhile when LPG prices are low to buy a small stock. The price fluctuates a lot and supply can be affected by world events (as with food) and not just local natural disasters.

I am the one in my house who builds these stocks - at home I was used to buying up 2-for-1 and other highly discounted foods during the limited time they were on offer and then not buying those particular items until they came back into offer again. Not possible here when 1 peso off a 500 pesos product is deemed a bargain!

Final tip: Having filtered out the toilet paper from river water, dry it and it can be re-used. Urghh!

 

Getting this "out of stock" reply is embarrassing and annoying. There is no doubt.

Many times they are out of stock indeed but I learned as well that if you get this reply you should not be shy to ask the same question just to a different sales person. Miracles happen. I did it more the once and the second or third guy just walked away and came back with the stuff a few minutes later. Especially City Hardware is good for that.

Of course it is annoying and embarrassing. On the other hand why should a sales guy or a waitress work his / her @ss off for 350 or 400 Peso a day ?

I experienced quality of service in restaurants and shops dependes significantly whether the owner is around or not. If you leave low wages pinoys alone it will end up in a desaster most of the time.

 

Addendum to my home out of stock perturbation: we are never out of rice.

 

Well, it depends what kind of goods we are talking about.

Is it about certain food, cigarettes, beer beer, or stuff like that, I will not get any notice until it is out of stock. Even if I had asked 10 seconds before. No chance.

If it comes down to cosmetics, soap, shower gel, hygienic stuff, lipsticks, cleaning utensils and stuff like that, our stock is probably bigger than Robindons, Hyper Market, Lee Plaza and City Mall together. Probably bigger as Lazada's as well.

I gave up and take it as it is.

 

We are somewhere between out of stock and a sari-sari. Probably hoarders. We have it but it's easier to go out and buy more than it is to find it.