What it is
One of the most commonly requested custom-built reports is available in Lightspeed Analytics. The dynamic reorder report provides reordering recommendations to ensure you order products that are at risk of running out and avoid over-ordering products that are selling poorly.
Using dynamic reorder points is a way of capitalizing on all your product data around sales and inventory levels and identifying the best actions for purchasing so that you can stay on top of meaningful inventory to bring to your customers.
How it works
The dynamic reorder report takes a customizable time period of a trailing sales sample of each item’s quantity sold at each of your retail locations. Based on the average daily volume, it projects a future trend for needed inventory, then compares that projected need to your current and expected inventory levels. Any difference with what you need will be the amount to order.
But more than that, based on a customizable delivery timeframe, the dynamic reorder report recommends what threshold to set in Retail POS for when a new order should be placed. This way, you won't run out of inventory while waiting for your next delivery.
The dynamic reorder report creates a list of all your inventory, pivots on your shop location, and illustrates in each column any recommended quantities to order based on current trends.
The report is sorted by the first store’s highest Quantity To order values. You can sort the report by any one of the store's needed quantities.
Configuring your report
To configure your report, click Configure report, located top-corner-right of the page.
To help you customize your report, here are some helpful steps:
Step 1: Define your trailing sales days
For each Category, you can choose how many days you want to include in your sales sample.
As a default, you can set this at the top level of your category or click on its name to expand it, set each of your sub-categories, and customize them with their own trailing sales days period.
If you tend to keep the same items on hand for most of the year, we recommend using a wider period between 30 to 90 days. These timeframes aren’t set in stone, so you can change the number of trailing sales data at any point to better suit your business needs.
Step 2: Define your forecast period
Similarly to the Category, you can choose how many days you want to include in your forecast period. Think about this as how many days worth of inventory you want to have on hand, or how frequently you want to send orders to your vendors.
Same as the Category, you can set as a default the number of days at the top level of the Category or click on its name to expand and set each of your sub-categories and customize them with their own forecast period.
Once defined, click Saves changes > Next.
Step 3: Define your vendor lead time
This step is to specify how many days on average it takes your vendors to fulfill and deliver your orders. Customizing the average lead time will make your dynamic reorder report more accurate. Once set up, click Save changes > Close.
It may take a moment before you see the calculation is completed for your projection model and your inventory movement. You will see a banner stating that your configuration is in progress.
Once completed, your new Quantity to Order value will be displayed in the report.
Understanding defined reorder points and reorder amounts
To see all data in the report, navigate to the Data section, where you can review the average daily sales volume, define how many days of stock you have on hand, how much is coming for inventory, and how much to order to keep up with current trends.
Customizations for more precise actions
Not all stores may need to be considered when purchasing. Likewise, not all items may need to be considered for dynamic reordering. Like any of the item reports, you can filter dynamic reorder points to certain stores, categories, brands, default vendors, etc.
New measures in the report
- Days of cover: how many days of sales you have in stock based on the current sales averages if your inventory is not replenished
- Dynamic reorder level: the recommended quantity of inventory to hold per store to meet anticipated demand in your forecast period.
- Dynamic reorder point: the recommended threshold for ordering new inventory so that, at your current sales volume, you don’t run out before receiving your new batch.
- Quantity to order: the quantity of an item you need to order to satisfy the demand for your forecast period which is calculated as follows:
- The reorder level - the quantity already on order - the quantity you already have on hand (QoH)
- Trailing average daily sales: the average quantity sold in one day during your trailing sales sample period.
Useful reports to use in tandem with dynamic reorder points
Dynamic reorder points follow your data to make recommendations about the future. To ensure that you're capitalizing on the best data integrity, a couple of other analyses will help you keep track of what your Analytics data is telling you.
Uncounted old inventory report
Are you confident that the inventory levels of items have been validated recently? Take a look at Uncounted inventory by running the report to see if any items may be due for a check.
Negative inventory is sometimes part of regular operations, but it can also sometimes be a surprise. You can use Lightspeed Analytics to determine how many items have negative inventory that may skew your recommended dynamic reorder actions.
Duplicate items interfere with accurate Analytics data. You can run a duplicate items report to find duplicates that may skew your recommended dynamic reorder actions.
Negative quantities to order?
As dynamic reorders set a forecast based on your inventory and sales numbers, if you have more inventory in stock than trends say you'll need in the forecasted period, the difference will be calculated as a negative value.
For example, if you anticipate selling 20 pairs of shoes, but you have 30 of them on hand, then we expect to see a value of -10 as the number for Quantity to order. This is also a way of beginning to illustrate transfer potential, highlighting where both needs and excesses of inventory may exist across your store network.
The best part of the dynamic reorder report
Reorder points help you take a more proactive approach toward reordering by lessening the need to monitor inventory levels across all inventory items constantly. Reorder points and levels (sometimes referred to as min/max levels) are established at the item level and are designed to automate PO creation.
To create a clean report, the Dynamic reorder report displays numbers to one decimal place. However, the calculations in the background are not rounded. As fractional inventory can't practically be ordered, the final quantity to order is rounded up when crossing the .5 mark.