Minimum stock
A threshold should trigger an action, not merely turn a row red.
Minimum stock is often used as an alert level: below it, the product deserves attention. It should not be confused with target stock, safety stock or reorder point, even though those numbers may sometimes be close in a small inventory.
01
Name the levels
The minimum threshold says when the team wants to review a product. Target stock says where to return after replenishment. Safety stock absorbs uncertainty, while the reorder point explicitly includes expected consumption during supplier lead time.
A small operation can simplify these concepts, but distinguishing them prevents a common mistake: ordering whenever stock reaches an arbitrary number and then filling up to another number chosen with equal scientific rigour.
02
Start from lead time
A product delivered tomorrow can operate with a low threshold. The same product delivered in three weeks needs more room. Turning average consumption into demand during lead time provides a more rational first base than a general feeling of comfort.
Then add protection for variability. The safety-stock calculator offers a simple peak method and a statistical method. The result remains an assumption to compare with the cost of stockouts and the cost of holding excess inventory.
03
Consider criticality
Two products consumed at the same rate do not necessarily deserve the same threshold. If the first can stop an entire service and the second has a local substitute, their operational risk is different.
Value pushes the decision in the other direction. A very high minimum on an expensive reference ties up cash. A useful level balances lead time, demand, variability, criticality and cost, which is why one rule for the whole catalogue rarely works well.
04
Review the threshold
A threshold is not a physical constant. Growth, a slower supplier or a pack-size change can make it obsolete. Consumption history and real stockouts provide concrete reasons to revise it.
Invumi combines threshold and target quantity in purchasing. When enough movements exist, forecasting adds an estimated crossing date. The number then stops being a red decoration and becomes a rule connected to time and replenishment.