Reorder Points Explained: Never Run Out of Stock Mid-Job Again

Every trade business has a version of the same story. The job is going well, the customer is happy, and then someone opens the van door and finds the shelf where the cable, fittings or fixings should be is empty.

The next hour disappears into a merchant run, the job overruns, and the schedule for the rest of the day starts to slip.

Running out of stock mid-job is rarely bad luck. It is almost always a stock control problem, and the fix is one of the oldest ideas in inventory management: the reorder point.

This guide explains what a reorder point is, how to calculate one, and how to put reorder points to work across your vans and warehouse without turning stock control into a full-time job.

What is a reorder point?

A reorder point is the stock level at which you reorder an item. When the quantity on hand drops to that level, you raise a purchase order.

Set correctly, the new stock arrives just before you would have run out, so you never hit zero and you never carry more than you need.

The reorder point is not a guess or a round number that feels safe. It is calculated from two things you already know about your business: how quickly you use an item, and how long your supplier takes to deliver it.

The reorder point formula

The standard formula is simple:

Reorder point = (average daily usage x supplier lead time in days) + safety stock

Breaking that down:

• Average daily usage is how much of the item your team gets through in a typical working day, across all vans and jobs.

• Supplier lead time is the number of days between placing an order and having the stock in your hands, not just dispatched.

• Safety stock is a buffer for the weeks that are not typical: a bigger job than usual, a supplier delay, or two vans needing the same item at once.

A worked example

Say your electrical team gets through six drums of 2.5mm twin and earth cable in a normal five-day week. That is 1.2 drums per day. Your wholesaler reliably delivers in two days, and you want two drums of safety stock as a buffer.

Reorder point = (1.2 x 2) + 2 = 4.4, rounded up to 5 drums.

When your count across the vans and the store drops to five drums, you reorder. By the time the last of the buffer is being used, the new delivery has landed. No merchant runs, no stalled jobs, and no cupboard full of cable you bought in a panic.

Why running out mid-job costs more than the part

The price of the missing item is the smallest part of the damage. When a van has to leave a live job to restock, you pay for it several times over:

• Lost labour time. An hour at the merchant is an hour of chargeable work gone, and often for more than one person if the job cannot continue without them.

• Retail pricing. Emergency purchases are usually made at counter prices rather than your negotiated account rates.

• Schedule knock-on. The overrun pushes the next job later, and a full diary has no slack to absorb it.

• A second visit. If the item cannot be sourced same-day, the job needs a return trip, which doubles the travel and admin for the same revenue.

First-time completion depends on the van carrying what the job needs. Reorder points are how you make that reliable instead of hopeful. For the bigger picture on van-level stock habits, see our guide to managing van stock.

How to set reorder points for a trade business

You do not need reorder points for every washer and screw. Start with the items that stop jobs when they run out, then work through the list below.

• Pick your job-stopping items. Go through your most common job types and list the materials that would halt work if missing: cable, consumer units, copper pipe and fittings, boiler spares, sealants, fixings you use daily. For most trade businesses this is 20 to 40 items, not hundreds.

• Work out real usage. Look at what you actually bought and used over the last one to three months rather than what you think you use. If you log materials against jobs, this is a report rather than a guess.

• Confirm supplier lead times. Use the realistic figure, including order cut-off times and delivery days, not the best case on the website. If a supplier is erratic, either use their worst normal lead time or find a backup supplier.

• Set safety stock deliberately. Higher for cheap items that stop expensive jobs, lower for costly items that tie up cash. A tube of silicone is worth over-stocking; a boiler heat exchanger is not.

• Apply the formula and record it. Calculate the reorder point for each item and record it wherever you track stock, so reordering becomes a rule anyone can follow rather than a judgement call only one person can make.

• Review quarterly. Usage changes with the seasons and the work you win. Heating parts move faster in winter; external work drives summer demand. Revisit the numbers every few months and after any supplier change.

Reorder points across vans and a warehouse

Reorder points only work if the stock count they trigger from is trustworthy. That is straightforward with one van and one owner, and much harder with five vans, a lock-up and a shared spreadsheet nobody quite keeps up to date.

The practical answer is to treat total stock across all locations as the figure you measure against the reorder point, and to keep that figure honest by logging materials to jobs as they are used.

When usage is recorded at job level, your stock position updates as a by-product of work your team is already doing, rather than depending on a Friday afternoon count that never happens. We cover the location side of this in detail in managing stock across multiple vans and a warehouse.

How iTrade helps

iTrade approaches stock control through the jobs themselves. Your team logs materials against each job as they are used, which does two things at once: every job is costed accurately, and you build a true picture of how fast each item moves.

• Stock usage reporting shows what your team is actually getting through, so your average daily usage figure comes from data rather than memory.

• The restocking report flags what needs topping up, so reordering becomes a routine check rather than a discovery made mid-job.

• Purchase orders can be raised against jobs, so replacement stock is ordered, tracked and costed in the same system. See our guide to purchase order software for trade businesses for how ordering fits into the wider workflow.

• Supplier price books through our materials management keep your account pricing in the system, so reordering at the right price is the default rather than something to check each time.

As standard, iTrade gives you usage-based stock visibility built from what is logged to jobs. If you want live counts per van and location, that is available through the optional Full Stock Control module. For a broader look at tightening up your processes first, start with how to improve stock management for trade businesses.

FAQs

What is the difference between a reorder point and a minimum stock level?

In practice they are used almost interchangeably, but there is a useful distinction. A minimum stock level is often a floor you never want to go below. A reorder point is the trigger to order, set above that floor so new stock arrives before you reach it. If you only keep one number per item, make it a calculated reorder point rather than an arbitrary minimum.

Do I need reorder points for everything I carry?

No. Apply them to the items that stop jobs when missing and to anything with a long lead time. Low-value consumables you can buy anywhere same-day do not justify the admin; just keep a sensible buffer.

How much safety stock should I hold?

There is no universal percentage, because the right buffer depends on how variable your usage is and how reliable your supplier is. A simple starting rule: cover your worst normal week, not your worst possible week. Increase the buffer for items where a stock-out halts an expensive job, and trim it for high-value items that tie up cash on the shelf.

Can I manage reorder points in a spreadsheet?

You can start there, and for a one-van business it may be enough. The weakness is the count itself: a spreadsheet only knows what someone remembers to type into it, and usage across multiple vans drifts from the sheet within weeks. The more vans you run, the more the counting needs to happen as part of the job workflow rather than as a separate chore.

Stop discovering empty shelves mid-job

A reorder point turns restocking from a reaction into a routine. Work out your job-stopping items, calculate the trigger levels from real usage and real lead times, and let the numbers do the remembering.

If you would rather the usage data collected itself, iTrade builds it from the materials your team already logs against jobs, with restocking reports and purchase orders in the same place. You can try everything free for 30 days with no credit card required; see current plans on the pricing page.