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Incoming inventory effectively helps you reduce your costs, because it is one of the best ways to manage inventory and improve incoming receipts as well. It helps you check the availability of required materials and thus reduce your inventory costs while enhancing and simplifying the production process. In this article, we will show you all the details about the incoming inventory as well as your inventory and how you can benefit from it in your online store.

What is Incoming inventory?

Before we start rolling out smart incoming inventory control solutions and how you can take advantage of them in your business to reduce your losses, we will first need to know what it is.

Incoming inventory is the purchase orders you have obtained that will be withdrawn from your inventory, it can help reduce inventory costs and simplify production.

Incoming inventory report 

is an important form of reporting in an online store or store, the purpose of which is to show what active purchase orders have been received for your online store or company during a certain period of time.

There are also a number of smart programs responsible for preparing the Incoming inventory report efficiently and accurately, so that it is ready to be viewed directly, which helps you in making better decisions.

It also consists of a number of columns, and each column has its own significance that you must be familiar with to understand the report, as:

• Product variant.
• Date and time (in UTC).
• Received on (when the order line was received).
• Purchase Order.
• Quantity ordered.
• Price (in your base currency).
• Discount level for this order line item (%).
• Supplier (for which the purchase order is issued to).

Incoming Inventory Transfers

is the stock that another store in your organization sends to you to fulfill your orders in the event that this stock is not currently available to you.

In order management to avoid wasting inventory as well as reduce costs for your organization, always try not to receive Incoming Inventory Transfers from any institution until you verify that you do not have this inventory.

Thus, you need to know the orders you need and whether they are available to you or not by following the actual stock level in your organization, and if it is not enough to meet your request, then you can start receiving Incoming Inventory Transfers without any problems.

The incoming inventory solution

In general, smart solutions play a major role in improving and simplifying operations further, and they have an effective role in reducing errors, and all of this in turn leads to a significant reduction in costs.

There are many smart incoming inventory solutions that streamline processes, eliminate manufacturing issues and better fulfill orders.

Also, through this solution, it is possible to improve the quality of these processes, which positively affects the reduction of costs and simplifies the production processes, through the available tools that allow full control.

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Reverse logistics is one of the most important operations, which involves moving products back through the supply chain, it specializes in taking back products from customers and reformulating those products or parts of them to create a new product that can be sold, and it  has many advantages that may positively affect the There are two main aspects to that process, returns management and refurbishment or remanufacturing, and in this article we will show you all the details about reverse logistics and how it affects your business.

What Is Reverse Logistics?

Before we get to know the nature of the work of reverse logistics, we will first need to define it to know what it is intended for.

We can define it as the value-added process that deals with how the company receives items from customers.

How Reverse Logistics Works

As for how it works, the most common scenario in which reverse logistics plays out is when a customer wants to return an item.

The process of how a company handles this product is an example of reverse logistics. it can operate in many different ways depending on the specifics of the business.

However, in almost all cases the process can be largely divided into two parts:

• Return management includes the process of actually managing the products that are returned to the company.
• Recycling is an aspect that makes a returned or recycled product ready to hit shelves again and be sold again.

Importance of Reverse Logistics to Your Business

Reverse logistics effectively helps in maintaining the flow of your goods more effectively, and this will pay off greatly in many important aspects of your business, the most important of which are:

• Reduce your costs.
• Risk reduction.
• Complete the product life cycle appropriately.

And it effectively helps in maintaining the flow of your goods more effectively, and this will pay off greatly in many important aspects of your business, the most important of which are:

• Reduce your costs.
• Risk reduction.
• Complete the product life cycle appropriately.
• Strengthen the revenue stream in your business.
• Facilitate the customer experience process.
• Improve the customer experience with your company.

Reverse logistics is also linked to some degree to the sustainable economy, in which companies find other ways to create new uses for products through recycling.

Benefits of Optimized Reverse Logistics

There is great importance to improving reverse logistics, as it gives the product a lot of financial benefits, which helps you save a lot of money as well as retain customers.

With the data that you get from your customers after the delivery options, you will be able to gain insight into your organization’s supply chain, which will improve products and your customers’ experience.

In addition to providing a better view of the supply chain, there are other advantages offered, the most important of which are:

• Increase in customer satisfaction with the services provided.
• Providing better and faster services.
• Enhance customers’ sense of your brand.
• Significantly increase sustainability.
• Maintaining clients.
• Significantly reduce costs.
• Reduce your losses by increasing your returns.

How Do Reverse Logistics Impact Supply Chain Management?

Reverse logistics greatly affects the management of the supply chain. Although it can help improve the supply chain, at the same time it can contribute to increasing its costs.

This will obviously hurt your profitability, as you will direct the additional revenue to cover higher supply chain costs.

Therefore the influence between it and supply chain management is very sensitive.

Monitoring Reverse Logistics in Your Supply Chain

Due to the great influence between reverse logistics and the supply chain, there is great importance to monitor it in the supply chain.

This is in order to find the best way to process the products, so that the company can eventually achieve the desired delivery targets.

This is due to the huge amount of information available on the ways that goods move back and forth through the supply chain.

All companies aim to deliver orders on time to provide the utmost perfection in the delivery process, in terms of time, place, condition, etc.

The only way to achieve this is to monitor the data properly, and it helps you optimize your ordering process.

Manage Reverse Logistics with Warehouse Management Software

Warehouse management software helps you manage incoming and outgoing logistics services, including reverse,

And because reverse logistics is essential to maintaining the reputation of your business, it is very important to use a warehouse management system (WMS).

In addition, a warehouse management system (WMS) will help you provide many advantages:

• Managing incoming and outgoing logistics.
• Deliver real-time analytics.
• Providing insights across transportation and logistics providers.
• Integrate the obtained information with the financial statements in the Enterprise Resource Planning (ERP) system.
• Easily track returns.
• Availability to monitor the movement of goods.
• Issuing credits through the accounting system and updating everything in the client’s record.

Therefore, we find that all companies are particularly interested in their logistics services, because they know that these revenues are one of the main sources of expenses.

Also, assessing the reverse logistics processes in your business will give you the ability to identify deficiencies, as well as help you address them.

Which will ultimately pay off to enhance the bottom line, visibly reducing your costs as well as increasing customer loyalty and raising your brand reputation.

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There are many methods of inventory valuation, and one of the most important methods is the weighted average cost, wac method, which is one of the inventory control methods that companies use in inventory operations in order to reach the cost of inventory, depending on the average price per unit of this inventory, and in this article we will show you all the details you need to know about the wac method, as well as its mathematical formula.

What is Weighted Average Cost (WAC)?

Weighted average cost or wac method is one of the evaluation methods companies use to find the average cost of each item.

The wac method calculations are based on the average price per unit, and we will explain this through its mathematical formula.

In it, all items purchased by the company during the accounting period are included, and they are used in the periodic inventory management system, which is the inventory that is conducted once at the end of the financial year.

Main advantages of wac method

The wac method has a lot of ways that distinguish it from other methods, and here are the main advantages that the Weighted Average Cost method offers you:

• Simplicity and ease of handling and use.
• Suitable for companies dealing with goods of equal importance.
• Fit economic units that are characterized by the relative stability of price levels during the period.
• Setting a standard unit cost contributes to stable profits even when inventory costs fluctuate.

Weighted Average Cost (WAC) Method Formula

The weighted average cost or wac method has a specific formula in which to calculate the average cost per unit price.

Here is the formula for the wac method:

• Weighted average cost = Costs of goods available for sale / Units available for sale
• Costs of goods available for sale means the starting value of the inventory plus the value of purchases.
• As for Units available for sale, they are all the units that the company can sell or the total units in inventory, which is calculated by summing both beginning inventory in units and purchases in units.

get to know : 6 Inventory Performance Metrics to Improve Inventory Management

Understanding Costs of Goods Available for Sale

The cost of goods available for sale is the bundling of costs, since the costs of goods available for sale are allocated to one of the following two divisions, where:

• COGS.
• Or ending inventory.

The allocation of the costs of available goods is referred to assuming the cost flow.

And there are many cost flow assumptions, including the weighted average cost or wac method, in addition to other assumptions such as:

• First-in, first-out (FIFO).
• Last-in, first-out (LIFO).

get to know : Optimize Your Putaway processes in logistics

The WAC Method under Periodic and Perpetual Inventory Systems

By using the wac method we can get more than one different allocation of inventory costs, under both periodic and perpetual inventory systems.

For a periodic inventory system, the company takes stock of the final inventory and applies costs for the product to determine the cost of the final inventory.

Then it can determine costs of goods sold by combining both the ending inventory and the cost of beginning inventory and purchases throughout the period.

As for the perpetual inventory system, we find that it helps in continuous tracking of inventory and costs of goods sold, and it also provides the company with timely information to manage inventory levels.

And this method of tracking inventory for the company is more expensive than the tracking method used in the periodic inventory system

Example of the WAC Method

To clarify what is meant by the weighted average cost or wac method, we will need to take an applied example to show how the weighted average cost formula works.

Assume that the total cost of all inventory is €116,000, of which €33,000 is for the initial inventory and €83,000 is for the purchased inventory.

The total units of inventory were 450 units, of which 150 were initially stock with an addition of 300 units purchased.

Thus, the weighted average cost (wac method) using the given formula is €257.8.

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The retail Supply Chain faces a lot of challenges that can hinder it and disrupt a lot of business. Especially after the coronavirus pandemic, many retailers are grappling and facing a large number of disruptions. One of the most important of these disturbances is a sudden rise in consumer demand for goods and services. This is in addition to delays in ports and a significant shortage of manpower, and there are a number of methods that can be followed to confront these problems. In this article, we will show you the 6 most important techniques that can be used to overcome the challenges facing the Retail Supply Chain.

What is a Retail Supply Chain?

A retail supply chain is one that deals directly with consumers or customers and is meant by a network of retailers who are involved in the production, delivery options, and sale of products to the final consumer.

Overcoming Challenges in the Retail Supply Chain

Recently, the difficulties faced by the retail supply chain have increased. This was clearly evident in the huge and unexpected rise in consumer demand management as well as the shortage of labor and the major disruptions at the ports.

But there are a number of approaches we can rely on to tackle the difficulties in the retail supply chain.

The following are the most important 6 basic techniques that help overcome retail supply chain obstacles:

1. Uncover opportunities for greatest impact

Continuous examination of the current supply chain will help you discover more areas that need improvement.

Which will help you to meet the needs of customers and keep up with events quickly, which will improve and maintain customer satisfaction.

2. Partner with a 3PL provider

Partnering with a 3PL provider will help you overcome challenges in the retail supply chain, who will provide you with objective insights into your operations.

And thus analyze the operations that you carry out on a regular basis and also identify the areas of greatest impact in addition to identifying the most important priorities.

3. Gain alignment with your supplier community

It is of great importance to align with your suppliers, to ensure that any changes are implemented successfully without hindrance.

This helps you to overcome any obstacle standing in the retail supply chain, through the information that the suppliers will provide you with, you will be able to:

• Monitor supplier performance.
• Make improvements periodically.

4. Understand the current challenges in your retail supply chain

In order to overcome the challenges facing Retail Supply Chain, you need to understand the current challenges in the retail supply chain.

And that is through evaluating the management of requests and having the appropriate vision from the suppliers that you deal with to understand the status of the request.

You will also need to assess how well you manage your inventory and whether or not you have a safe stock. All of this will help you tackle any hurdles that arise in the retail supply chain.

5. Invest in shipping software

Investing in shipping software will help you improve your delivery process while effectively keeping pace with changes.

The automation of the delivery or shipping method will counter any sudden or unexpected changes, such as a sudden change of weather.

Reliance on shipping software will also enhance the delivery of products to customers, thus improving customer satisfaction and retention.

6. Gain internal alignment

You can’t overcome any of the challenges in the retail supply chain without checking your internal processes.

As you need to renew your supply chain by conducting an effective strategy across the company and its divisions as a whole.

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With increasing operational requirements in businesses, it has become important to attempt Warehouse Expansion whenever the opportunity arises. Through which warehouses will be optimized, as well as keeping pace with operational requirements. Especially since warehouses play a major role in the trade process, as they represent the cornerstone of warehousing and shipping activities as well as distribution. In this article, we will talk about the Warehouse Expansion process, as well as its most important negatives and positives.

What is the warehouse expansion process?

Warehouse expansion is meant to increase the space of your warehouse, to keep business running smoothly.

Especially since in light of business growth and increasing operational requirements, companies are in dire need to expand their warehouses to keep pace with these changes.

Through the process of warehouse expansion, you will be able to get more space in your warehouse, and thus store a greater amount of items.

Increasing your warehouse space will help you improve your existing systems, as well as increase the flexibility and ability of your workforce.

Do you know what is inventory tracking?

Warehouse expansion pros and cons

There are a number of pros and cons to the warehouse expansion process, and here are the most important of those pros and cons to benefit from each of them:

Pros of warehouse expansion

The following are a number of points that explain the most important advantages of the warehouse expansion process:

• Enjoy a competitive advantage in meeting your needs.

• Increase the productivity and efficiency of your workers.

• Improve deficiencies in your existing systems.

• Reaching optimum standards in your operational processes.

• Rethink and improve your technology infrastructure.

• Expand your capabilities to meet customer requests.

What Is on Demand Warehousing?

Cons of warehouse expansion

Despite the huge advantages of the warehouse expansion process, there are a number of drawbacks to it. And the following are the most important of these drawbacks:

• The need for a large financial investment.

• Taking a long time to expand the warehouse space.

• Increasing labor and operating costs.

So be sure to weigh the pros and cons of this process, and choose the decision that brings you and your business the greatest possible benefit.

When to consider warehouse expansion alternatives

Before you consider warehouse expansion and focus on its benefits and take advantage of it, you will first need to check that this is the right option for your business.

Despite the huge benefits that can accrue to your business from the warehouse expansion, you may incur a greater risk in return.

And in the event that you cannot afford the costs related to the warehouse expansion process. Then here you will start to think about the expansion process alternatives.

Here are a number of points that show you when to start thinking about these alternatives:

If your brand can’t handle the expansion process

Then the solution is to cooperate with a third-party logistics company (3PL). Thus, saving a lot of expenses, and enjoying greater discounts on shipping operations.

There is a problem in hiring sufficient manpower for the expansion process

If you are unable to hire a suitable team, you will not benefit from that expansion process. The solution here is to cooperate with a third-party logistics company (3PL).

So the most suitable and least expensive alternative to the expansion process is to outsource it to 3PL, who will take charge of the inventory for you.

get to know : Stock Availability Is a Key to Last Mile Performance

How 3PLs support your warehouse performance

3PLs play an important role in enhancing the performance of your warehouse, without the need for additional expenses on expanding your warehouse.

As 3PLs help reduce overheads, as well as take responsibility for managing and auditing inventory and other freight logistics.

Also, by cooperating with a suitable 3PL, you will be able to expand your space easily, by contracting only the space that you need and that you will actually use.

This saves you a lot of expenses, and thus saves you money in the short term and helps you to employ it in other businesses that benefit your business.

If you want to cooperate with a suitable logistics partner, Diggipacks is your best choice.

Which offers you various logistics services that you may want, with the highest efficiency and the best prices to maintain the flexibility of your business.

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Inventory valuation is one of the ways in which you can find out the cash amount associated with the goods in stock at the end of the accounting period. The process of stock valuation depends on the costs incurred to obtain and prepare the stock for sale Inventories are the largest current business assets, and stock valuation allows you to evaluate the cost of goods sold, and ultimately determine your profitability, and in this article we will show you what is meant by stock valuation, its importance, and the most important ways to calculate it.

What is inventory valuation?

Inventory valuation is an accounting practice that companies follow to find out the value of their unsold inventory at the time they prepare their financial statements.

Inventory is an asset to the organization, and to be recorded on the balance sheet it must have a financial value.

This value can help you determine your inventory turnover ratio, which in turn will help you plan your purchasing decisions.

get to know : Weighted Average Cost wac method

What are the different inventory valuation methods?

The method for valuing inventory depends on how the business tracks inventory over time, and the business must value inventory at cost.

There are 5 ways to evaluate the company’s inventory, and the following are those methods:

Weighted Average Cost (WAC)

Using the WAC valuation method, inventory and cost of goods sold are based on the average cost of all items purchased during a period.

This method is typically used when a business does not have a significant variance in its inventory.

And the average cost per unit is calculated by dividing the total cost by the total number of units purchased during the year.

• Weighted average cost per unit = Total cost of goods in inventory / Total units in inventory

This method is also commonly used to determine the cost of units which are indistinguishable from each other and it is difficult to track individual costs.

First in, first out (FIFO)

This method is based on the premise that the first inventory that is purchased is the first that is sold, and the remaining assets in inventory are matched to the assets that were recently purchased or produced.

It is one of the most common inventory valuation methods companies use because it is simple and easy to understand.

During inflation, the FIFO method results in a higher value for final inventory, a lower cost of goods sold, and a higher gross profit.

Unfortunately, the FIFO model fails to provide an accurate depiction of costs when there is a rapid rise in prices, and this method does not offer any tax advantages.

And it is one of the common inventory valuation methods.

get to know: How Do Reverse Logistics Impact Supply Chain Management?

Last in, first out (LIFO)

Under this inventory valuation method, the newest inventory is assumed to be sold first while the oldest inventory remains in stock.

Companies rarely use this method because old inventories are rarely sold and gradually lose value, and this results in significant loss to the business.

The only reason to use LIFO is when companies expect the cost of inventory to increase over time and lead to price inflation.

By moving high-cost inventories to the cost of goods sold, companies’ reported profit levels can be lowered, and this allows companies to pay lower taxes.

First Expired, First Out (FEFO)

The FEFO method is a method in which the goods with the closest expiration period must be removed or sold first, regardless of whether the goods entered the warehouse first or later.

The FEFO method is commonly applied by food retailers and pharmacies, and products containing semi-expired products are usually placed in front shelves or in easily accessible places.

This is so that customers can take it right away, and products with a long shelf life are usually stored in the warehouse first.

Specific Identification

Under this method, every item in your inventory is tracked from the time it is stored until it is sold, and is typically used for large, easily identifiable items.

This method has different advantages and costs, and the prerequisite for this method is that you must be able to track each item individually.

This can be done through the use of an RFID tag, a stamped receipt date, or a serial number.

While this method offers a high degree of accuracy in stock valuation, it is limited to valuing rare, high-value items that require such discrimination.

Is Inventory an Asset?

Yes, inventory is one of the most important assets of the company; in fact, it is one of the largest current assets of companies.

So a monetary value is provided to the components that make up the inventory in what is known as inventory valuation.

Where the inventory must be evaluated correctly in order to ensure the accuracy of the financial statements.

If the inventory is not measured correctly, this will lead to the mismatch of expenses and revenues in the correct way.

This leads to incorrect business decisions, and for inventory accounting, the periodic inventory system and the perpetual inventory system are used.

We find that in the periodic inventory system, sales are recorded when they occur without updating the inventory, while in the perpetual inventory system, accounting records are always provided that show the amount of stock available.

Also, records are kept for each item in stock in the ledger, and the account is updated every time a sale or purchase is made.

Since the perpetual inventory system requires determining the cost of goods sold, multiple inventory valuation methods must be used.

get to know : 5 Types and tips to reduce the Inventory Costs

Importance of inventory valuation

The inventory valuation process plays an important role in determining the company’s financial position.

The following are the most important benefits of inventory valuation:

• Determine the company’s financial position. A wrong inventory calculation can affect the correctness of the company’s financial statements such as net income and profit or loss in the current year.
• Calculate liquidity ratios that help in knowing how easy it is to convert inventory into cash.
• Take advantage of tax deductions, so inventory costs can be deducted from gross income while reporting to the IRS.
• Determining the financial value of the stock in case the company is sold or acquired.
• Follow-up of the overhead costs on inventory, especially the costs of purchasing merchandise.

Inventory Management and Valuing Your Inventory with Diggipacks

Diggipacks gives you the best technology that will help you in managing inventory and valuing your inventory.

This is done by following the latest technological methods that enhance the efficiency of your business and make it more flexible and in line with the challenges of the markets at the present time.

Diggipacks has extensive experience in logistics and provides smart solutions for businesses and online stores. Thus, it can help you with your company’s Inventory valuation.

And that through a team of specialists in the field of logistics. So whatever the size of your business, Diggipacks puts your business first, helping you keep it going.

This will give you a real opportunity to keep track of your inventory, shipping, delivery options rates, and financial reports.

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Partial truckload shipping is one of the most popular shipping methods used by many small merchants when shipping their goods. It is also characterized by its reasonable costs and suitable capacity for small goods, as well as being one of the fastest shipping modes. This is because they do not stop during transit but head towards their final destination, which means that goods are processed through them faster. In this article, we will provide you with all the details about this method of shipping and how it works as well.

Partial truckload definition

It is a shipping mode that does not need to use a full truckload trailer when shipping various items.

The partial truckload, which is between full load and LTL, helps this type of truck pass through the crossing gates faster, because it involves less handling.

Benefits of partial truckload

The partial truckload option is the perfect solution for anyone who wants a more affordable shipping method.

It is located between full and half full cargo load, and it brings users many benefits, the most important of which are:

• Use of one truck, as it ensures that you collect your cargo in one truck during the shipping process, this means that items are loaded once and unloaded once which will reduce transit times and thus speed up the shipping process.
• Avoid additional fees associated with reclassification of shipping, which is one of the main benefits of partial truckload shipping that distinguishes it from other shipping methods.
• Reducing cargo handling time, which helps reduce the chances of errors, so it is the most suitable option for shipments for shipments that are prone to damage during the shipping process.

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Disadvantages of partial truckload

Despite the amazing advantages that partial truckload shipping has, this method has a number of disadvantages, and the following are the main disadvantages of partial truckload shipping:

• Having lower load capacity than other shipping methods, which makes a large number of shipping companies not provide partial truckload shipping methods.
• The high degree of complexity when using this method of shipping due to the low shipping capacity which makes this method not widely available with shipping companies.
• Shipping fees are constantly changing, as partial truckload shipping costs are determined by the market itself, based on the route and miles traveled during the shipping process.

get to know : 6 Keys to Overcoming Challenges in the Retail Supply Chain

The difference combination of partial and shared truckload

Many find it difficult to choose between partial truckload shipping and shared truckload shipping. In fact, there is a difference between them. Whereas:

• Partial truckload is used to transport cargo in one shipment and its load capacity is limited and costs are determined by the market itself and are borne by the individual.
• In the case of a shared truckload, the person shares with another person or group of people in transporting his goods, that is, he does not consume the load alone, that is, he takes a share of it according to what suits him. Thus, it is less expensive, but in return it is more disruptive and takes a long time to process because it stops at many stations during the transfer process.

So when choosing between them, specify your requirements and choose according to them. And if you want to keep costs down, you can use shared truckload shipping.

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There are many types of inventory operations, and the Physical Count of Inventory is one of the most important types. In general, the inventory process is one of the most important operations in the financial accounting system.

Whereas, during which all assets and liabilities owned by the institution are counted, and the aim is to compare what is recorded in the accounting books with what is actually and materially present in the institution. Accordingly, the necessary corrections and adjustments are recorded, so that the account balances match what is in reality.

In the end, create an honest picture of the company’s performance and its financial statements, and in this article we will show you all the details about the Physical Count of Inventory.

What Is Physical Inventory Count?

It is the process that takes place at the end of the year in which all liabilities and assets owned by the company are counted.

This is after the trial balance is extracted, after completing all the accounting records for the fiscal year.

The objective of the Physical Count of Inventory is to compare what is recorded in the accounting books with what is physically and physically in the company.

And then the necessary adjustments are recorded. This is until there is a match between the account balances with what is in reality.

Taking a Physical Count of Inventory

Physical Count of Inventory is most likely done at the end of the fiscal year, which companies use as one of the organized methods of calculating a company’s inventory.

The company schedules this inventory at the end of the financial period that it specifies in its report.

Types of physical inventory counts

There is more than one type of Physical Count of Inventory process and each type has its own style and technique.

Below we will show you the 4 most important types of Physical Inventory Count:

1. Electronic or POS counting

It is the most modern inventory method within the Physical Count of Inventory, which uses scanners and other technologies to calculate inventory.

What distinguishes this method is that it greatly reduces counting errors, and it saves a lot of time and effort.

But on the other hand, this method requires high costs to use it, so until now there are many companies that do not apply it.

This method is a form of digital transformation in Physical Count of Inventory.

2. Cycle Count

It is also a popular Physical Count of Inventory type in which random parts of a stock are counted at different times.

This method helps reduce the time or resources used in counting, but it often does not give the company an accurate account of its inventory.

It is one of the most widely used types of Physical Count of Inventory

3. Manual inventory counting

It is a type of traditional Physical Count of Inventory in which manual recording is used based on counting and writing in paper to record inventory.

The most characteristic of this method of inventorying inventory is its low cost, but in return it is disadvantaged by the high rate of errors as well as the huge effort in writing and recording on paper.

4. Full physical inventory

It is the most accurate type of Physical Count of Inventory, in which the company relies on hiring employees specifically for the entire inventory process.

Through it, the company can obtain accurate inventory records. But one of its main drawbacks is that it consumes a lot of labor and time, as well as requires shutting down the operations of the company.

But it is the most efficient way to take inventory within Physical Count of Inventory types

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Online retailers need to use appropriate metrics that help them verify that customers’ orders arrive quickly, and order lead time is one of those important metrics. It is also in the huge development of electronic commerce as well as the boom in retail trade over the Internet, making the practice of commerce and business differ greatly. This was also reflected in the customers’ expectations, as their expectations became clearly high.

Customers always expect their orders to reach them as quickly as possible and without any delays. Therefore, companies operating in online Retail stores are facing many challenges and operating in a more competitive market. In this article, we will provide you with all the details about the order lead time, its types, and how to calculate it as well.

What is the order lead time?

The order-lead-time is one of the primary metrics that helps retailers check that customers’ orders don’t take much time to reach them.

It plays a large role in the planning of re-orders, which is reflected in the overall inventory control.

The term time off itself carries many meanings, which refer in various forms to the period between the start of a process and the completion of that process.

Order lead time types and their calculations

There is more than one type of order-lead-time and each type has its own formula and definition for the calculation. We will review all of this in detail below:

1. Actual order lead time

Actual order-lead-time is the first type of metric that specializes in measuring how quickly customers receive orders.

This means the total time it can take to complete the request after the request is submitted

The presence of any abnormal data is an indication that something went wrong during the fulfillment process. Besides that metric, you’ll need additional stats to boost its power.

Here is its mathematical formula:

• Actual order lead time = Delivery Date – Order Entry Date

2. Requested order lead time

The second type of metric specialized in measuring the speed of customers receiving orders is Requested order-lead-time.

Which refers to the time between the customer placing the order and the date he wants to receive the order.

The Requested order-lead-time indicator gives you a quick and simple idea of ​​how long customers want to wait to receive orders. Here is its arithmetic:

• Requested order lead time = Requested Delivery Date – Order Entry Date

3. Quote order lead time

The third type of metric that specializes in measuring how quickly customers receive orders is Quote order-lead-time.

It indicates the amount of time acceptable to fulfill the demand from the point of view of your customers, and the following is its arithmetic formula:

• Quote order lead time = Customer’s Agreed – Upon Delivery Date – Order Entry Date

Confirmed order lead time

The last type of metric type that specializes in measuring the speed of customers receiving orders is the Confirmed order-lead-time.

This metric indicates your company’s ability to meet customer-specific demand management. Here is its mathematical formula:

• Confirmed order lead time = Internally Agreed – Upon Delivery Date – Order Entry Date

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