In this article, we describe what buffer inventory management is, why it’s superior to traditional min-max and forecasting approach, and how the StockM inventory management system automates buffers, orders, and assortment for wholesalers and manufacturers in the Baltic States, Nordic countries, Central and other parts of Europe.
What is buffer-based inventory management for trading and manufacturing companies?
For many wholesalers and manufacturers, inventory management seems like a balancing act between having too much inventory overall and still not having enough of the key products. With buffer-based inventory management, there is an exit from this circle. The approach goes beyond the conventional min-max levels and forecasting, using pre-defined buffers based on real demand and lead time.
Under this methodology, every important item is designed with a predetermined buffer as its safety factor. This buffer varies according to the importance of the item, as well as its speed of consumption and the time taken to replenish it. Just by looking at your inventory, you can quickly determine whether the item is safe, under pressure, or consuming too much of your budget. If the demand pattern changes, the buffer can be adjusted accordingly and kept up to date.
It becomes even more useful when you work with many SKU’s, several distribution centers, many stores, and fluctuating demands. Under such conditions, the issue is usually not of laziness but of inability to get a simple, consistent answer regarding what needs attention. The buffer methodology provides this platform.
Definition: inventory management using buffers
Inventory management using buffers refers to an approach where each particular product has its buffer, which depends on demand, lead time, and business significance. All orders, priorities, and assortment management are determined by the state of these buffers, not just by the minimum-maximum rules or forecasts.
What makes this technique different from classical min-max and forecasting?
In many companies in the Baltics, Nordics, and Central Europe, classic planning still looks like this: min and max levels set once or twice a year, forecasts prepared in Excel, and planners working overtime to cover the gaps between those numbers and reality. The market changes, customer behaviour shifts, lead times become less reliable, but parameters remain the same for long periods. Over time, planning turns into firefighting.
Buffer-based methodology is built on the opposite principle. Instead of trying to predict the future perfectly, it focuses on responding correctly to what is happening now. The questions are practical:
- How fast does this particular item sell?
- How dependable is the supplier?
- How much protection do we want for the item?
Buffers are set accordingly and then adjusted over time based on how each item actually behaves.
It will also change the way that the priorities are displayed on the planner’s dashboard. In the classic system, the buyer might have a long list of SKUs without any indication of which SKUs need action urgently. In the buffer environment, the SKU location in the buffer automatically indicates whether action is required or not. Thus, instead of browsing through numerous SKU lists, the planner has to deal with only those SKU items that actually need attention.
Finally, it clarifies the linkage between the operation and finance functions. It is very general to speak of “too much stock” or “not enough stock.” The buffer-based system allows for a very concrete and precise discussion in terms of particular SKUs and buffers. Having an insufficient buffer means having a risk of service, while an excessive buffer means having a financial risk.
What is the buffer of the inventory, and what makes it important for availability?
- Imagine the buffer as your conscious decision regarding the degree of protection for specific items. It is neither some arbitrary safety stock amount in the hidden table nor something unpredictable.
- Different items require different levels of protection. Critical spare parts, essential to your production line operation, or the best-selling item in the sales channel, need a higher buffer than the slower-moving C-item. Otherwise, you will have either no items needed or will spend too much money on unnecessary items.
- Buffers help you separate the signals from the noise. If you receive a one-off huge order for your item, but it still stays within the buffer zone, then there is nothing wrong. However, if the position of the item constantly goes below the lower border of the buffer, it means that you are not protected enough. Conversely, if the position of the item stays above the buffer level for an extended period of time, it is a good candidate for buffer reduction and gradual sell-down.
How do buffers operate in reality?
To make buffer management user-friendly, buffers should be divided into three zones – green, yellow, and red zones. It transforms all those numbers into traffic-light signals, which are readily understandable by everyone on your team.
- Green zone – all is fine, no need to worry at this point. If the inventory level of a particular item remains excessively high in the green zone, then it is an indication that the safety buffer is too large and can be reduced.
- Yellow zone – you are drawing upon your reserved supply, but it is not dangerous yet, and the inventory levels are optimal.
- Red zone – there is actual danger to the availability of the item, and actions must be taken.
By analyzing the performance of SKUs over a period of time, you will be able to see which SKU spends most of the time in the green zone – this SKU is a candidate for controlled stock reduction. And items which often find themselves in the red zone – these are clear indications for planners of what to pay attention to. You don’t need to check all SKUs every day.
The improvement of the model should be your primary responsibility in the case of buffer zones. If you notice that the buffer spends most of its time in the red zone, it indicates that something is wrong – either there is insufficient buffer size, high volatility of the lead time, or an incorrect replenishment profile. When the buffer is constantly situated far above the green zone or even at its very top, it probably indicates that the buffer size is excessive or the replenishment profile is too active. The analysis of the buffer regarding the zones is rather simple.
This is the reason why buffer graphs are such a good tool. Graphs before and after optimization for just one SKU tell more than any long explanation can do: from crazy spikes and low stocks to a controlled process with certain limits. This behavior of the buffer is constantly being analysed in automated inventory systems such as StockM.
What are the ordering process and frequency in a buffer-based system?
In a buffer-based system, it is not necessary to order each time there is one less box on the shelf. It is typical of companies to place orders once per week, bi-weekly, or monthly, usually by each supplier or each warehouse, and this buffer system takes this into consideration.
The system considers your usual schedule and lead-time information and evaluates the extent to which each buffer has been depleted. It suggests the quantity to be ordered to refill the buffer to the required target level before each ordering date. The larger the demand, the more the suggested quantity increases. The lower the demand, the smaller the suggested quantity – sometimes even zero. This means that consumption remains the same regardless of ordering; only the quantities that need to be ordered become different.
The planning and purchase team follows a clear process:
- Review newly generated orders and send them to suppliers.
- Check items that are not yet due for reordering but whose stock levels have already reached the “red zone” or are depleted – these may require an urgent order from the supplier.
How is this implemented in real companies?
Implementation does not start with tuning parameters. It starts with understanding where you really are today. Typically, that means analysing:
- Where stockouts are happening?
- Where stock is clearly too high?
- How reliable your lead times are?
- How much working capital is tied up in inventory?
Once you see this picture, it becomes much easier to decide which items, locations, or product categories to tackle first.
The next step is designing initial buffers. You look at sales history, variability, lead times, and business criticality and set a buffer per item or per item group. Then you configure your planning system so that planners can see buffer positions, colour zones and suggested orders in one place.
No organization will replace all its procedures overnight. It starts with a pilot: one warehouse, one category, or one range of products. Where there are problems and where effects can be observed. In the pilot, planners adopt the new perspective and logic, while management assesses the effects compared to the traditional procedure.
Routine related to the model is another essential part of implementation:
- Who analyzes which reports?
- When and how often do buffers need checking?
- How are exceptions handled?
- Who can make changes to parameters?
Without routine, even the most sophisticated model remains theory. With routine, buffer-based planning turns into a sound daily management practice.
How does StockM work with buffer-based approach?
All of that could be done manually, but it would take lots of efforts and time. That’s why StockM is created to automate all of that.
StockM is an industry-standard inventory and assortment management tool used by wholesalers, distributors, and manufacturers to apply a buffer-based approach in real life. StockM gets your sales, stock, and lead-time information and keeps buffers for each of your managed SKUs. The system analyzes the movement of your SKUs from the green through the yellow to the red zone and automatically shows you what is important now:
- SKUs in the red zone that require some attention.
- SKUs where buffers are too high or too low constantly.
- SKUs that require buffer reduction, cautious replenishment or delisting.
Based on the information about the supply schedules and the lead times that you have provided, StockM provides recommendations regarding ordering during future supply events. No more guessing about when and how much to order: your planning process starts with a ready-to-use list of products to be ordered by priority, with calculated quantities depending on the state of the buffer and replenishment rhythms.
Concerning the assortment selection, StockM helps you to determine:
- Which SKUs need to be preserved in your assortment as critical buffer-based products?
- Which SKUs can have their buffer size reduced or can be ordered more cautiously?
- Which SKUs may be subject to discontinuation or selling out?
To put it briefly, StockM allows you to implement buffer-based inventory management in practice in daily operations rather than just using it as a theoretical approach. The decisions are made by you and your team while StockM performs all the necessary calculations and processing.
What kind of inventory performance will the companies achieve?
If buffer-based planning is implemented seriously – together with a supporting system for sustaining it – a company will generally have a double benefit: higher availability of key items and a more reasonable overall inventory level.
For distributors, this normally implies:
- Fewer stockouts of A-items.
- Less emergency orders and urgent shipments.
- Slow and careful reduction of slow-moving and obsolete inventory.
As opposed to arbitrary reductions across-the-board, you use buffers where they are clearly excessive and safeguard buffers where stockouts have negative consequences.
For manufacturers, the improvements will become evident in production performance: with properly designed buffers for key parts and materials, production stops breaking down “due to a lack of one small component” while excess inventory levels can be decreased.
Taking into account more than 20 years of experience and cooperation with more than 100 companies, some trends linked to the StockM system implementation can be outlined as follows:
- Total decline in the inventory balance of 15-30% during 12-24 months after the StockM system implementation;
- Drop in lost sales from 10% to 3%;
- Drop in inventory surplus from 40% to 20%.
These results are achieved by the company within 12-24 months of the StockM system implementation and acceptance of its principles of operation.
However, each company is unique; therefore, taking into consideration such factors as financial limitations, etc., there should be an appropriate change in the strategy, meaning that priority should be placed on supply stability for A-items, whereas stockout for other goods can be accepted for a certain period. This unique solution is obviously reached in collaboration with StockM’s experts in inventory management.
What mistakes can organizations make when adopting the buffer concept?
There are some typical things to watch out for:
- Thinking of buffers as yet another dashboard. Traffic light reports and visuals may help, but nothing will happen without someone taking action about red and yellow lights and guidelines about what needs to be done in response to these signals.
- Letting buffers sit there unchanged forever. The market situation, product assortment, and delivery timeframes keep changing. Without reevaluations of buffer sizes, the organization is doomed to experience similar problems to those with static min–max inventory limits.
- Using a sophisticated approach to bad data. If the lead times in the system do not reflect reality, or if the history of sales has a lot of holes, the rationale for the approach will be hard to follow. It is better to apply the approach in those areas of the assortment where data is available, demonstrate its feasibility, and then gradually expand it.
- Failing to consider the human factor. Individuals who have been working for many years using their intuition and taking hasty decisions will be wary of the constraints that will be imposed by the new rules. The management has to ensure that buffer-based planning does not become yet another report, but rather the new way to talk about inventories. If management uses a consistent approach, other people will follow suit.
The StockM solution helps to avoid all these issues through prioritization, tracking of changes, and simple routines.
When should buffer-based inventory management be used in your company?
Buffer-based inventory planning will suit your needs if you:
- Deal with numerous SKUs and warehouses.
- Experience frequent fluctuations in demand.
- See that your company holds a lot of money in inventory with no positive impact on its service level.
If you find yourself saying “we have too much stock in general but still run out of the most important items” you are absolutely the perfect candidate for buffer-based planning.
Buffer-based planning will be particularly useful for wholesalers and distributors operating using multiple warehouses, branches, or plants. In such cases, it will be difficult to reconcile local decisions while using buffer-based logic, and a tool such as StockM, which you can use to benchmark and allocate your stock according to its effectiveness.
If your company deals exclusively with project activity and unique products, buffers will form only one part of the solution. You will still need to plan your projects and forecast further. Nevertheless, buffer-based planning will bring considerable benefits to your repetitive product range.
How to begin in this way?
Begin by considering your data from the buffer standpoint. Select some of your existing inventory, such as a single warehouse or a certain family of products, and ask yourself the following questions:
- What places experience shortages of inventory too often?
- What places always have excesses of stock?
- What is actually important to us from a sales or production perspective?
Then you may develop your first set of buffers and understand just from the first look at it that the decision-making process using buffer philosophy will differ from the current processes.
The next stage will be a systematic test. Pick the area that needs to be addressed because of real issues and whose impact can be easily assessed. Establish buffers, build procedures for interacting with them by planners, and monitor results after several months.
When this pilot proves successful in terms of numbers and in terms of the experience of the teams working on the pilot, you can begin to expand this concept into other places. This will mean that buffer-based planning is no longer a project but a process for your company’s inventory management. With StockM, this approach is already part of your everyday screen: you have buffers, priorities, orders, and assortments based on live data.
FAQ: StockM and buffer-based inventory management
StockM controls buffers for SKUs, taking into account demand and lead time, visualizing the status of buffers and SKUs by moving them through green, yellow, and red areas and letting planners see which SKUs require action and what buffers to change.
StockM is used by companies in the Baltics, Nordics, and Central Europe with central warehouses and remote sites, looking to minimize overstock, eliminate stockouts, and make assortment decisions using real-time data rather than spreadsheets.
StockM is a professional inventory and assortment planning tool that manages buffer-based planning for wholesalers, distributors, and manufacturers.
In this article, we describe what buffer inventory management is, why it’s superior to traditional min-max and forecasting approach, and how the StockM inventory management system automates buffers, orders, and assortment for wholesalers and manufacturers in the Baltic States, Nordic countries, Central and other parts of Europe.
What is buffer-based inventory management for trading and manufacturing companies?
For many wholesalers and manufacturers, inventory management seems like a balancing act between having too much inventory overall and still not having enough of the key products. With buffer-based inventory management, there is an exit from this circle. The approach goes beyond the conventional min-max levels and forecasting, using pre-defined buffers based on real demand and lead time.
Under this methodology, every important item is designed with a predetermined buffer as its safety factor. This buffer varies according to the importance of the item, as well as its speed of consumption and the time taken to replenish it. Just by looking at your inventory, you can quickly determine whether the item is safe, under pressure, or consuming too much of your budget. If the demand pattern changes, the buffer can be adjusted accordingly and kept up to date.
It becomes even more useful when you work with many SKU’s, several distribution centers, many stores, and fluctuating demands. Under such conditions, the issue is usually not of laziness but of inability to get a simple, consistent answer regarding what needs attention. The buffer methodology provides this platform.
Definition: inventory management using buffers
Inventory management using buffers refers to an approach where each particular product has its buffer, which depends on demand, lead time, and business significance. All orders, priorities, and assortment management are determined by the state of these buffers, not just by the minimum-maximum rules or forecasts.
What makes this technique different from classical min-max and forecasting?
In many companies in the Baltics, Nordics, and Central Europe, classic planning still looks like this: min and max levels set once or twice a year, forecasts prepared in Excel, and planners working overtime to cover the gaps between those numbers and reality. The market changes, customer behaviour shifts, lead times become less reliable, but parameters remain the same for long periods. Over time, planning turns into firefighting.
Buffer-based methodology is built on the opposite principle. Instead of trying to predict the future perfectly, it focuses on responding correctly to what is happening now. The questions are practical:
- How fast does this particular item sell?
- How dependable is the supplier?
- How much protection do we want for the item?
Buffers are set accordingly and then adjusted over time based on how each item actually behaves.
It will also change the way that the priorities are displayed on the planner’s dashboard. In the classic system, the buyer might have a long list of SKUs without any indication of which SKUs need action urgently. In the buffer environment, the SKU location in the buffer automatically indicates whether action is required or not. Thus, instead of browsing through numerous SKU lists, the planner has to deal with only those SKU items that actually need attention.
Finally, it clarifies the linkage between the operation and finance functions. It is very general to speak of “too much stock” or “not enough stock.” The buffer-based system allows for a very concrete and precise discussion in terms of particular SKUs and buffers. Having an insufficient buffer means having a risk of service, while an excessive buffer means having a financial risk.
What is the buffer of the inventory, and what makes it important for availability?
- Imagine the buffer as your conscious decision regarding the degree of protection for specific items. It is neither some arbitrary safety stock amount in the hidden table nor something unpredictable.
- Different items require different levels of protection. Critical spare parts, essential to your production line operation, or the best-selling item in the sales channel, need a higher buffer than the slower-moving C-item. Otherwise, you will have either no items needed or will spend too much money on unnecessary items.
- Buffers help you separate the signals from the noise. If you receive a one-off huge order for your item, but it still stays within the buffer zone, then there is nothing wrong. However, if the position of the item constantly goes below the lower border of the buffer, it means that you are not protected enough. Conversely, if the position of the item stays above the buffer level for an extended period of time, it is a good candidate for buffer reduction and gradual sell-down.
How do buffers operate in reality?
To make buffer management user-friendly, buffers should be divided into three zones – green, yellow, and red zones. It transforms all those numbers into traffic-light signals, which are readily understandable by everyone on your team.
- Green zone – all is fine, no need to worry at this point. If the inventory level of a particular item remains excessively high in the green zone, then it is an indication that the safety buffer is too large and can be reduced.
- Yellow zone – you are drawing upon your reserved supply, but it is not dangerous yet, and the inventory levels are optimal.
- Red zone – there is actual danger to the availability of the item, and actions must be taken.
By analyzing the performance of SKUs over a period of time, you will be able to see which SKU spends most of the time in the green zone – this SKU is a candidate for controlled stock reduction. And items which often find themselves in the red zone – these are clear indications for planners of what to pay attention to. You don’t need to check all SKUs every day.
The improvement of the model should be your primary responsibility in the case of buffer zones. If you notice that the buffer spends most of its time in the red zone, it indicates that something is wrong – either there is insufficient buffer size, high volatility of the lead time, or an incorrect replenishment profile. When the buffer is constantly situated far above the green zone or even at its very top, it probably indicates that the buffer size is excessive or the replenishment profile is too active. The analysis of the buffer regarding the zones is rather simple.
This is the reason why buffer graphs are such a good tool. Graphs before and after optimization for just one SKU tell more than any long explanation can do: from crazy spikes and low stocks to a controlled process with certain limits. This behavior of the buffer is constantly being analysed in automated inventory systems such as StockM.kės pradėjo trūkti arba atvirkščiai – prekės paklausa sumažėjo ir atsargų lygis tapo perteklinis. Prekės buferio elgesį nuolat analizuoja ir tokios automatizuotos atsargų sistemos kaip StockM.
What are the ordering process and frequency in a buffer-based system?
In a buffer-based system, it is not necessary to order each time there is one less box on the shelf. It is typical of companies to place orders once per week, bi-weekly, or monthly, usually by each supplier or each warehouse, and this buffer system takes this into consideration.
The system considers your usual schedule and lead-time information and evaluates the extent to which each buffer has been depleted. It suggests the quantity to be ordered to refill the buffer to the required target level before each ordering date. The larger the demand, the more the suggested quantity increases. The lower the demand, the smaller the suggested quantity – sometimes even zero. This means that consumption remains the same regardless of ordering; only the quantities that need to be ordered become different.
The planning and purchase team follows a clear process:
- Review newly generated orders and send them to suppliers.
- Check items that are not yet due for reordering but whose stock levels have already reached the “red zone” or are depleted – these may require an urgent order from the supplier.
How is this implemented in real companies?
Implementation does not start with tuning parameters. It starts with understanding where you really are today. Typically, that means analysing:
- Where stockouts are happening?
- Where stock is clearly too high?
- How reliable your lead times are?
- How much working capital is tied up in inventory?
Once you see this picture, it becomes much easier to decide which items, locations, or product categories to tackle first.
The next step is designing initial buffers. You look at sales history, variability, lead times, and business criticality and set a buffer per item or per item group. Then you configure your planning system so that planners can see buffer positions, colour zones and suggested orders in one place.
No organization will replace all its procedures overnight. It starts with a pilot: one warehouse, one category, or one range of products. Where there are problems and where effects can be observed. In the pilot, planners adopt the new perspective and logic, while management assesses the effects compared to the traditional procedure.
Routine related to the model is another essential part of implementation:
- Who analyzes which reports?
- When and how often do buffers need checking?
- How are exceptions handled?
- Who can make changes to parameters?
Without routine, even the most sophisticated model remains theory. With routine, buffer-based planning turns into a sound daily management practice.
How does StockM work with buffer-based approach?
All of that could be done manually, but it would take lots of efforts and time. That’s why StockM is created to automate all of that.
StockM is an industry-standard inventory and assortment management tool used by wholesalers, distributors, and manufacturers to apply a buffer-based approach in real life. StockM gets your sales, stock, and lead-time information and keeps buffers for each of your managed SKUs. The system analyzes the movement of your SKUs from the green through the yellow to the red zone and automatically shows you what is important now:
- SKUs in the red zone that require some attention.
- SKUs where buffers are too high or too low constantly.
- SKUs that require buffer reduction, cautious replenishment or delisting.
Based on the information about the supply schedules and the lead times that you have provided, StockM provides recommendations regarding ordering during future supply events. No more guessing about when and how much to order: your planning process starts with a ready-to-use list of products to be ordered by priority, with calculated quantities depending on the state of the buffer and replenishment rhythms.
Concerning the assortment selection, StockM helps you to determine:
- Which SKUs need to be preserved in your assortment as critical buffer-based products?
- Which SKUs can have their buffer size reduced or can be ordered more cautiously?
- Which SKUs may be subject to discontinuation or selling out?
To put it briefly, StockM allows you to implement buffer-based inventory management in practice in daily operations rather than just using it as a theoretical approach. The decisions are made by you and your team while StockM performs all the necessary calculations and processing.
What kind of inventory performance will the companies achieve?
If buffer-based planning is implemented seriously – together with a supporting system for sustaining it – a company will generally have a double benefit: higher availability of key items and a more reasonable overall inventory level.
For distributors, this normally implies:
- Fewer stockouts of A-items.
- Less emergency orders and urgent shipments
- Slow and careful reduction of slow-moving and obsolete inventory.
As opposed to arbitrary reductions across-the-board, you use buffers where they are clearly excessive and safeguard buffers where stockouts have negative consequences.
For manufacturers, the improvements will become evident in production performance: with properly designed buffers for key parts and materials, production stops breaking down “due to a lack of one small component” while excess inventory levels can be decreased.
Taking into account more than 20 years of experience and cooperation with more than 100 companies, some trends linked to the StockM system implementation can be outlined as follows:
- Total decline in the inventory balance of 15-30% during 12-24 months after the StockM system implementation;
- Drop in lost sales from 10% to 3%;
- Drop in inventory surplus from 40% to 20%.
These results are achieved by the company within 12-24 months of the StockM system implementation and acceptance of its principles of operation.
However, each company is unique; therefore, taking into consideration such factors as financial limitations, etc., there should be an appropriate change in the strategy, meaning that priority should be placed on supply stability for A-items, whereas stockout for other goods can be accepted for a certain period. This unique solution is obviously reached in collaboration with StockM’s experts in inventory management.
What mistakes can organizations make when adopting the buffer concept?
There are some typical things to watch out for:
- Thinking of buffers as yet another dashboard. Traffic light reports and visuals may help, but nothing will happen without someone taking action about red and yellow lights and guidelines about what needs to be done in response to these signals.
- Letting buffers sit there unchanged forever. The market situation, product assortment, and delivery timeframes keep changing. Without reevaluations of buffer sizes, the organization is doomed to experience similar problems to those with static min–max inventory limits.
- Using a sophisticated approach to bad data. If the lead times in the system do not reflect reality, or if the history of sales has a lot of holes, the rationale for the approach will be hard to follow. It is better to apply the approach in those areas of the assortment where data is available, demonstrate its feasibility, and then gradually expand it.
- Failing to consider the human factor. Individuals who have been working for many years using their intuition and taking hasty decisions will be wary of the constraints that will be imposed by the new rules. The management has to ensure that buffer-based planning does not become yet another report, but rather the new way to talk about inventories. If management uses a consistent approach, other people will follow suit.
The StockM solution helps to avoid all these issues through prioritization, tracking of changes, and simple routines.
When should buffer-based inventory management be used in your company?
Buffer-based inventory planning will suit your needs if you:
- Deal with numerous SKUs and warehouses.
- Experience frequent fluctuations in demand.
- See that your company holds a lot of money in inventory with no positive impact on its service level.
If you find yourself saying “we have too much stock in general but still run out of the most important items” you are absolutely the perfect candidate for buffer-based planning.
Buffer-based planning will be particularly useful for wholesalers and distributors operating using multiple warehouses, branches, or plants. In such cases, it will be difficult to reconcile local decisions while using buffer-based logic, and a tool such as StockM, which you can use to benchmark and allocate your stock according to its effectiveness.
If your company deals exclusively with project activity and unique products, buffers will form only one part of the solution. You will still need to plan your projects and forecast further. Nevertheless, buffer-based planning will bring considerable benefits to your repetitive product range.
How to begin in this way?
Begin by considering your data from the buffer standpoint. Select some of your existing inventory, such as a single warehouse or a certain family of products, and ask yourself the following questions:
- What places experience shortages of inventory too often?
- What places always have excesses of stock?
- What is actually important to us from a sales or production perspective?
Then you may develop your first set of buffers and understand just from the first look at it that the decision-making process using buffer philosophy will differ from the current processes.
The next stage will be a systematic test. Pick the area that needs to be addressed because of real issues and whose impact can be easily assessed. Establish buffers, build procedures for interacting with them by planners, and monitor results after several months.
When this pilot proves successful in terms of numbers and in terms of the experience of the teams working on the pilot, you can begin to expand this concept into other places. This will mean that buffer-based planning is no longer a project but a process for your company’s inventory management. With StockM, this approach is already part of your everyday screen: you have buffers, priorities, orders, and assortments based on live data.
FAQ: StockM and buffer-based inventory management
StockM controls buffers for SKUs, taking into account demand and lead time, visualizing the status of buffers and SKUs by moving them through green, yellow, and red areas and letting planners see which SKUs require action and what buffers to change.
StockM is used by companies in the Baltics, Nordics, and Central Europe with central warehouses and remote sites, looking to minimize overstock, eliminate stockouts, and make assortment decisions using real-time data rather than spreadsheets.
StockM is a professional inventory and assortment planning tool that manages buffer-based planning for wholesalers, distributors, and manufacturers.
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In this article, we describe what buffer inventory management is, why it’s superior to traditional min-max and forecasting approach, and how the StockM inventory management system automates buffers, orders, and assortment for wholesalers and manufacturers in the Baltic States, Nordic countries, Central and other parts of Europe.
