Change with Impact

Differentiated planning

Make renewal of inventory simple and systematic

With differentiated planning, your reordering is determined by the characteristics of the items you already have in stock. This approach makes your planning easier and ultimately more cost-effective.

Differentiated planning

The basic principle behind differentiated planning is similar to the one we use when we do our regular food shopping. Whether we are aware of it or not, our shopping routine is guided by a practical and simple system. A system that is based on when a given item is needed in our household – every day, regularly or rarely.

“Routine”, “regular” and “rare” renewal categories

Some products, for example bread and milk, typically go into our shopping basket every time we shop for food – and in more or less the same quantity. By making a fixed shopping cycle for these products, a great deal of the total variation in our shopping basket is eliminated. And since the need is stable, the risk of waste is small.

Other products only go into our basket once in a while – for example pasta, eggs or detergent. The simplest way to plan when to shop for these items is to establish a reorder point. For example, when there are only two eggs left in the refrigerator, you automatically write “eggs” on the shopping list. In other words, when the stock level of a given product decreases below the reorder point, it is time to reorder. In practice, this is carried out by monitoring stock levels on a regular basis.

Finally, there are products that only find their way into our shopping basket on special occasions – luxury items such as champagne, for example. Regardless of their volume, these types of products will always be difficult to plan. So, the most obvious solution is to choose not to include them on your inventory list, but to buy them when a specific need arises.

If you wish to learn more about how differentiated planning can help your organisation establish a simple and cost-effective inventory renewal system, get in touch, and let us help you put it into practice.