Summary
This article walks through how excess root cause analysis is performed in the "Excess and Overstock Screen".
Applies To
Items classified as excess in StockIQ
Process
When excess inventory is present, StockIQ will do a check against common causes of stocking out to help you arrive at a reason for why this occurred.
This list of things that StockIQ will check is below:
- Buyer Over Purchase - This looks for instances where the purchasing agent bought quantity in excess of StockIQ's recommendation, by looking at the order quantity versus StockIQ's saved historical order recommendations.
- Order Policy Mismatch - This looks for the active order policy of the item differing from the recommendation in StockIQ's order policy matrix, indicating an override or a policy out-of-sync with the item's current status.
- Canceled Demand or Sales Order- This looks for canceled orders within the last lead time that could cause what was a sensible order to now lead us to excess
- Large Min Max - If you have an extremely large min or max relative to the item's consumption rate, the item could now be in excess.
- Lead Time Mismatch - This looks for orders delivered far earlier than expected, which would lead to excess inventory if it arrived in advance of needed/expected.
- Safety Stock Decrease - This compares safety stock in the past versus now. Was an order sensible against stocking policy at the time, but now SS has reduced, meaning the same quantity now shows as excess or overstock?
- Forecast Reduction - similar to above, this checks for forecast from a lead time ago versus today, and checks to see if our forecast has undergone adjustments that could cause us to now be in excess versus what was a sensible suggestion at the time.
- On Hand Changes - Have there been any other un-explained inventory changes (i.e. increases), such as adjustments that we cannot otherwise account for in receipt history?
- Over Forecasted - Does it look like we are simply over forecasting demand for this item if we look at consumption over the last lead time?