Overcoming Minimum Order Quantity (MOQ) Challenges

3 minread

Tags: Blog

Tracey Baker, Marketing Manager

Tracey Baker   20 October 2019


Index

  1. Does this MOQ conundrum sound familiar?
  2. Utilising EazyStock to overcome MOQ challenges
  3. How EazyStock’s order fill-up functionality works
  4. Removing MOQ frustrations with EazyStock

Does this MOQ conundrum sound familiar?

Have you ever had to create a supplier order for an item (let’s call it item A) to send to your main supplier and quickly realised that you’re below their minimum order quantity!

What do you do?

Maybe you just add on a few more of item A, or order some of item B to bump up your quota and then top off the order with some of item C to hit the magic MOQ number? (Even though there’s no forecasted demand for items B or C!).

On the plus side, you’ve managed to hit the minimum order requirement and order the all-important item A’s that you need from your supplier. But on the flip side, you now have additional stock of items B and C that you didn’t require, taking up additional space in your warehouse and tying up working capital.

To make things worse, when your ordering window rolls around the following week, you realise that you need to go back to that supplier and place an order for item D – starting the process all over again!

Minimum order quantities, values and weights are a common challenge for inventory planners and purchasers. This blog is therefore going to look at how EazyStock’s order fill-up functionality can make life much simpler when it comes to supplier order management.

 

Utilising EazyStock to overcome MOQ challenges

EazyStock’s order fill-up functionality helps inventory teams meet their suppliers’ contractual minimum order quantities, values or weights, in the most cost-effective way possible. The exclusive functionality is part of the EazyStock inventory optimisation tool, and is designed to keep excess stock under control, by only ordering stock that has a future forecasted demand.

The functionality kicks in when you’re placing a supplier order and find that you’re short of your minimum order quantity, value or weight. At this point you can ask EazyStock to recommend items from the same supplier with actual upcoming demand to fill-up the order, instead of items selected at random or by ‘guess-work’. This way, you’re ordering stock that you know you will soon need, instead of items that could lead to excess stock levels.

Using the example above, EazyStock would have recommended ordering item D, instead of filling up the order with items A, B and C. EazyStock would have identified the future demand for item D and pulled the order forward, ensuring investment was made in the right items.

 

How EazyStock’s order fill-up functionality works

EazyStock is an automated inventory optimisation tool that helps you carry the right stock, in the right quantities, in the right locations, at the right time. With this in mind, EazyStock is constantly analysing all your SKUs based on their demand and supply characteristics, including their demand pattern and volatility, pick frequency, cost to sell and supplier lead times – to name a few. The system then calculates which items to stock and produces daily replenishment recommendations.

Once you have your initial order lines confirmed, you can go to that supplier’s profile in EazyStock and click “order fill-up”.

 

EazyStock's Order Fill-up Feature page 1

 

From there, you’ll get a full list of the SKUs from that supplier, along with the upcoming recommended orders. You can fill out the supplier’s order value, order volume or order weight and EazyStock will identify which items you should order to meet the required amount. If you’re happy with the recommended orders, you simply click “create order lines” and send the request to your ERP to produce a purchase order, or straight to your supplier.

 

EazyStock's Order fill-up functionality screen 2

Removing MOQ frustrations with EazyStock

Suppliers often impose minimum quantities, values or weights on their orders to keep things economical for them, but often at the expense of their customers. EazyStock’s order fill-up functionality is an easy way to overcome this.

EazyStock users save a lot of money by ordering items that they will need (either now or in the near future) and by not tying up capital in excess stock. Plus, by filling up an order with items with upcoming demand, they minimise the number of orders they need to place with their suppliers – saving even more money. Inventory planners or purchasers will also be more efficient and save time that would otherwise be wasted combing through SKUs and trying to determine the way to reach an MOQ or cube out a container.

So, with fewer orders, increased inventory accuracy, less excess stock, more working capital and improved efficiency, it’s easy to understand why the order fill-up functionality is a firm favourite with many EazyStock users.

Want to learn more? Please contact us for a demo or call us on 0121 312 2992.