What is Critical Stock in E-commerce?
Critical Stock is regarded as a stock that stays in interim storage areas over an extended period. This type of stock does not move within the time frame specified in the system.
Significance of Critical Stock in E-commerce Logistics
The movement of any stock that creates trouble for warehouse management and inventory management is processed in an interim storage area. In this process, the warehouse activity monitor displays the critical stock and makes it feasible to distinguish the movement of supplies lacking complete processing within a sustainable time. In many cases, this determines the factors responsible for causing the critical situation.
Prerequisites for Critical Stock
The prerequisites to calculate critical stock include –
- Determination of monthly order quantity
- Observing a secured quantity
- Observing one’s Critical Inventory Number
- Making allowances for processing time
The system will only recognize critical stock for a warehouse number if the interim storage stock is activated with the “without movement” entity while customizing for the registered warehouse number on the report selection screen.
The report will record all the recognized critical stocks in the database table. All of the bin stocks this table holds will be viewed as critical stocks by the warehouse activity monitor if they remain in the long run.
Customizing allows you to define the critical duration for each warehouse number and movement type. Furthermore, you can define monitoring of all stock or only one stock in dynamic storage bins.
Use case with Critical Stock
Some of the use cases with critical stock are discussed below-
- The warehouse activity monitor can show the critical stock for consignment in the interim shipping area. This implies that there are issues of open goods for materials that so far have not been dispatched.
- It is possible to display transfer orders that correlate with a critical quantity for a crucial material. In many circumstances, it is feasible to pinpoint the reason behind the event of the critical situation.