Keep distributors stocked to norm without excess or stockouts
An illustrative consumer goods and distribution concept connecting distributor closing stock, stock norms, secondary sales velocity, and pending primary orders for distributor inventory and stock norms.
SKUs within stock norm (%)
Distributor days of cover
Fast-mover stockout incidence (%)
Slow stock value above norm
THE CHALLENGE
Distributor stock is either too low on fast movers or too high on slow ones
Stock not visible
Closing stock is reported irregularly or not at all.
Static norms
Stock norms do not change with seasonal sales velocity.
Fast-mover gaps
High-velocity SKUs run out while slow SKUs pile up.
Ordering by habit
Primary orders follow last month's quantity rather than need.
THE SOLUTION
Distributor Stock Norm Framework
Stock reporting
Collect daily or weekly closing stock from every distributor.
Velocity-based norms
Set norms from recent secondary sales velocity and lead time.
Gap identification
Compare stock with norm for every SKU and distributor.
Order suggestion
Show suggested primary quantities for sales team review.
THE APPROACH
Closing Stock Collection
Standardise closing stock submissions and track missing reports.
Sales Velocity Calculation
Calculate rolling daily secondary sales by SKU and distributor.
Norm Recalculation
Recalculate days-of-cover norms with lead time and seasonality.
Below Norm Alerts
List SKUs below norm at each distributor for action.
Excess Stock Review
Identify slow stock above norm for liquidation or transfer review.
Suggested Order Review
Provide suggested order quantities that sales teams approve or adjust.
THE IMPACT
Stock visibility
Distributor stock could be seen alongside sales.
Right-sized norms
Norms could reflect current velocity rather than fixed targets.
Fewer gaps
Fast-mover shortages could be caught before outlets run out.
Working capital
Excess slow stock could be reviewed early.
Controlled review
Authorized teams could review distributors below stock norm on fast movers or holding excess slow stock, with source evidence retained beside each review case.
Measurable evaluation
A pilot could establish baseline values for SKUs within stock norm (%) and assess changes after approved actions. Descriptive results alone would not establish causality.
Explore Distributor Inventory And Stock Norms
Work with RUSA Analytics to connect distributor closing stock, stock norms, secondary sales velocity, and pending primary orders and create a governed workflow to review distributors below stock norm on fast movers or holding excess slow stock. Start with a scoped concept or pilot and agreed success measures.
MORE WORK
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