Days Supply

[TonyCuylle]

I am currently in the process of fixing mistakes that Reynolds made in our ordering criteria of 6 dealerships. Thanks to Chuck I have managed to change our ABC classes. However I now have a problem with days supply. I hate to sound stupid, but with our old AS400 system, the ordering criteria was based on weighted sales, now I would like to know what the industry standard would be for days supply on FAST, MEDIUM and SLOW moving parts. Right now Reynolds has set up my fast moving parts with a low days supply of 7 and a high days supply of 8, medium parts with a low days supply of 20 and a high days supply of 22, slow parts with a low days supply of 28 and a high days supply of 30. I am almost sure that this is wrong. Can someone out there point me in the right direction.

[David S]

Tony:

Serious consideration needs to be given to each dealer point due to differences in supply from the manufacturers. Order frequency and lead-time as well as fill rate from the manufacturer are the prime concerns.

Also the days of supply setting will vary based on the range of parts in a particular source.

Here is the initial set-up we use until the inventory is stabilized.

0-3 sales per year: 34low-35high, 4-12 sales per year: 28low/29high, 13-35 sales per year 21low/22high, 36+ sales per year: 14low/15high.

Since you are reviewing all of your Reynolds set ups, I would also make sure that in 2324 your sales search period is set to 3 months (weighted average) and question #7 is set Y.