What is a shortage?
Definition and terms for missing parts: The missing parts quantity in logistics means that the quantity at picking during stock removal or the quantity at goods receipt in the goods receipt does not match the order quantity.
Shortfall quantity costs in the case of a shortfall quantity
In the case of a production requirement, the costs of missing parts can be very high. A shortfall quantity can even cause a complete standstill in production. The costs can amount to several millions. Loss of orders, delay in delivery, interruption of the supply chain, change to the competition are the consequences in this case.
In shipping logistics, the service level for customers is poor when a shortage occurs. Subsequent deliveries are annoying and cause additional costs. The costs of missing parts can be enormously high if the customer completely switches to the competition.
Why do shortages occur?
Shortfalls are caused by incorrect materials management and incorrect procurement. The cause is: too small book inventory compared to the demand (wrong business management). Also the outflow of stock and the expected value in demand can also be wrongly estimated.
The occurrence of shortfalls can also be caused by errors on the part of suppliers in quantity-dependent supply.
- wrong disposition
- Incorrect receipt of goods (wrong product delivered)
- faulty planning and materials management
- incorrect stock levels due to picking errors
- Lack of information
In a warehouse, shortfalls occur directly during withdrawals and stock removals due to incorrect picking. Several technical systems can be used to reduce the missing parts quantities: Pick-to-Light, Voice Picking, Pick-by-Point, Pick-by-Frameetc.
Consequences of a shortage
A shortage can have very different effects (here only as an example):
- Stop of production, delivery delays and material shortages
- Subsequent deliveries at a later date
- Discounts by the difference
- High shortage costs
- often a manual material search
- Disturbances in the production process
Conclusion
A shortage causes shortage costs, delivery delays, material bottlenecks and should be kept to a minimum in inventory management. Interruptions in production are the consequences. If the stock is too small, a delivery delay occurs in the order (shortfall). The occurrence of material bottlenecks is always very important for companies.
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