Using count data to rebalance stock between warehouses

A count is usually treated as a way to correct the books. It is also a rare moment when you know exactly how much of each product sits in each warehouse. Put that next to recent shipments and the picture is often lopsided: the main warehouse holds half a year of a product while the market unit, where it actually sells, is nearly empty. This article shows how to turn a count into a short, sensible list of transfers.

What you need on one sheet

For every SKU in every warehouse you need four columns:

1. Counted quantity from the latest count.
2. Quantity already reserved or in transit.
3. Average weekly shipments from that warehouse over the last four to eight weeks.
4. Weeks of cover, which is available quantity divided by average weekly shipments.

The first two come from the count and the books. The third comes from your dispatch records: total shipped in six weeks divided by six, which a pivot table by SKU and warehouse produces in a minute. Leave out weeks distorted by a promotion or a one-off bulk order, or the average will mislead you. Weeks of cover is the number that makes the comparison fair, because a stock of 240 pieces is large for one warehouse and tiny for another.

An example with three sites

Suppose SKU B-0360, a Bluetooth earbud, was counted like this:

• Main warehouse: 240 pieces, 10 shipped per week, so 24 weeks of cover.
• Market unit: 20 pieces, 25 shipped per week, so 0.8 weeks of cover.
• Marketplace warehouse: 60 pieces, 30 shipped per week, so 2 weeks of cover.

Together there are 320 pieces and 65 shipped per week, almost five weeks of cover for the company as a whole. Nothing is missing overall, yet the market unit will run out in less than a week.

Now pick a target of three weeks of cover for each selling site. The market unit needs 75 pieces and has 20, so it needs 55 more. The marketplace warehouse needs 90 and has 60, so it needs 30 more. A carton holds 12 pieces, so round up: 5 cartons (60 pieces) to the market unit and 3 cartons (36 pieces) to the marketplace warehouse. That is 96 pieces out of the main warehouse, which keeps 144 as a reserve.

Do the same for the whole range, sorted by weeks of cover. SKUs under one week at a selling site while another site holds many weeks come first; the rest can wait for the next round.

Rules to apply before moving anything

• Move only stock that is confirmed. A bin that is still waiting for a recount should not be the source of a transfer, or the gap simply travels to another site.
• Compare the cost of moving with the benefit. A transfer of two cartons across the city may cost more than the sales it protects.
• Move whole cartons, and respect minimum quantities. Splitting a carton creates a loose item that will soon be misplaced.
• Never empty the sending site. Leave it enough for its own shipments until the next replenishment.
• Do not move slow items just to look tidy. If a product has not shipped from anywhere for months, a transfer only relocates the problem; flag it for a decision.

Book the transfer properly

A transfer is two events: goods leave one site and arrive at another. Issue one transfer document with a number, keep the goods in an "in transit" status until the receiving site has counted them in, and compare what left with what arrived. If cartons are opened on arrival, the count at the receiving site is the one that matters.

In the example above the note lists SKU B-0360, 8 cartons, 96 pieces, with the two destinations on separate lines. Each receiving site counts the cartons in and signs. If the market unit receives 4 cartons instead of 5, the shortfall of 12 pieces is documented on the day, not a mystery at the next count.

Repeat it, but not too often

Redo the comparison after every full count and review it monthly in between. Weekly rebalancing sounds responsible, but constant small moves mostly generate paperwork and fresh errors. Pick a threshold, for example "move only if a site has under one week of cover while another has over ten", and act when a SKU crosses it.

InventoryHub's inventory data reports include a warehouse-by-warehouse comparison and the SKUs with the largest gaps, so the count results arrive in a form you can put next to your shipment history.