Stock on the shelf is not a promise: on hand, reserved, available and incoming

A customer rings a wholesaler on Tuesday afternoon and asks for forty pipe couplings by Thursday. The person on the sales desk opens the stock screen, reads forty-two, and says yes. On Wednesday the picker walks to the location and finds twelve.

Nothing was miscounted. Thirty of the forty-two were picked into a cage on Monday for a contractor who collects on Friday, and the screen counts what is in the building. Sales answered the question the screen was built to answer. It was the wrong question.

Four numbers that share one name

Most offices say “stock” and mean whichever of these they happen to be looking at.

• On hand. What is physically in the building, whoever it is meant for.
• Reserved. On hand, but committed to an order that has not shipped yet.
• Available. On hand minus reserved. This is the only number a promise for today can be made from.
• Incoming. Ordered from a supplier and not yet received. It is a forecast with a date attached.

A stock figure can be perfectly accurate and still produce a broken promise, because accuracy belongs to the first number and the promise belongs to the third.

Where the promise goes wrong

The failures are ordinary, and each one is a sensible habit seen from the inside.

• The reservation happens at picking, not at the order. Between the order on Monday and the pick on Wednesday, the same goods can be sold twice. Both orders were accepted in good faith.
• Incoming is read as if it had arrived. The supplier confirmed sixty for Wednesday. Forty-eight came, on Thursday. The promise was made against the confirmation.
• Stock that cannot be sold is counted as stock. Damaged goods waiting for a claim, a customer’s own goods held for them, a pallet in quarantine. All of it is on hand. None of it is available.
• The unit changes between screens. Purchasing buys in boxes of twenty-five, the warehouse counts pieces, and the customer orders metres.
• It is in the other warehouse. The figure was right for the company and wrong for the branch that has to deliver tomorrow.

A part delivery is a decision, and it has an owner

When the available quantity is short, there are two honest answers: ship what is there now and the rest later, or hold the order until it is complete. Each has a price. A second delivery costs a second stop on a run. Holding the order may cost the customer a day with fitters standing on site.

That choice belongs to the customer, and the right moment to offer it is while they are still on the phone. That only works if the shortage is visible when the order is entered. Once it is discovered at the shelf, the warehouse decides by default and the customer finds out from the delivery note.

The line that stays behind needs two things written against it: a date, and a person. A back order without an owner tends to be rediscovered by the customer.

The delivery day is a stock fact and a transport fact

A wholesaler with its own vans is not promising “picked on Thursday”. It is promising “on your site on Thursday”. Whether that holds depends on which run covers that area, whether the vehicle has the weight and the floor space left, and when picking has to be finished for the goods to make the run.

When stock lives in one system and the run plan in another, sales promises from the first and dispatch discovers the second. The customer hears “yes, Thursday” and then “we are sorry, Friday”, from two people who were each right about their half.

What this does not fix

• A wrong count. Available is calculated from on hand. If the shelf figure is wrong, every number built on it is wrong too, and looks precise.
• A late supplier. Separating incoming from on hand stops you promising goods you do not have. It does not make them arrive.
• Reservations that never die. A quotation that holds goods for six weeks empties the available figure without anyone selling anything. Someone has to decide how long a reservation may live without an order behind it.

An exercise for a quiet afternoon

Take ten order lines from last month that shipped late or short. For each one, ask three questions. Which number did the person read when they made the promise? Which of the four was it really? When was the reservation made, at the order or at the pick?

Most wholesalers find that the count was correct in the large majority of cases. The promise was made from the wrong one of four correct numbers.

Where navichain stands

navichain keeps stock, purchasing and transport on one set of figures. Reserved goods are held, so the same pallet is never promised twice. On-hand quantities are kept per article and per warehouse, in the unit you actually count in, with every receipt, pick and correction on an audit trail. Purchase orders are received against the order, so “ordered” and “arrived” stay two separate facts, and the supplier’s delivery note and invoice are checked against both before you pay.

The part that most stock systems leave out is the delivery. In navichain the runs that carry the goods are planned in the same system, so a picked order becomes a booking on a vehicle without anyone re-typing it, the driver’s signed proof of delivery lands against that order, and the customer follows it in their own portal. The platform page sets out what sits inside. You keep your accounting where it is, and there is no implementation fee to get started: a single module is typically live in days.