The 30-day rule - Inventory management |
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Supply chain management: The 30-day rule of inventory


Generally, when a company says it has 30 days of inventory on hand, it means that it stocks inventory to match its typical selling flow. So stock is continually replenished to maintain a 30-day supply, which is based on previous sales patterns and often calculated using software.

But that does not necessarily mean you can simply walk in on any day in one month and ask for a specific amount of goods on that day.

Inventory management is a precise art that has a large effect on a warehousing company's cash flow. Most suppliers tend to stock just enough raw goods to cover what they typically sell in a month. Since inventory management can achieve significant savings, many suppliers subscribe to lean techniques, which optimize this matching of stock requirements to sales as closely as possible.

If you are not on a supplier's list of buyers, you might not be able to access the 30-day supply because the company has not accounted for your order. Most companies stock an overflow for these kinds of eventualities, but not all do.

That is why it is important to question the particular supplier on what exactly is meant by a 30-day stocking of goods inventory.