Reorder Points: How to Set Them So You Never Run Out

The worst time to discover you're low on a material is when you're trying to fill an order. A reorder point prevents it: it's the stock level that, when you hit it, means "order more now." Set it right and you reorder with just enough runway to restock before you ever reach zero.

What a reorder point really is

It's the amount you want left in stock at the moment you place a reorder — enough to carry you through the wait for the new supply to arrive. Two things decide it: how fast you use the material, and how long your supplier takes to deliver.

The simple formula

Multiply your usage rate by your supplier's lead time, then add a little safety buffer for the days a delivery runs late or sales spike:

• Usage rate — how much of the material you go through per day or week.
• Lead time — how long from placing an order to having it in hand.
• Safety buffer — a cushion for late shipments and busy stretches.

Reorder point ≈ (usage rate × lead time) + safety buffer. If you use 2 lbs of wax a week and your supplier takes 2 weeks, you need at least 4 lbs on hand when you reorder — call it 5 with a buffer.

A reorder point turns "I think I'm getting low" into "it's time — order now."

Tune it over time

Your first numbers are estimates; adjust them as you learn. If you keep cutting it close, raise the point or the buffer. If supplies sit too long, lower it. Seasonal businesses may want a higher point heading into the busy season.

Let the alert come to you

The point of a reorder point is not having to check. Set one on each material and let the system flag it when stock drops to that level. Hivara watches your material stock against the reorder points you set and alerts you when it's time — so running out becomes a decision you make, not a surprise you discover.