5 Ground Rules: How to Achieve an Effective Supply Chain

1 min read

17. February 2026

Supply chain is the key to happy customers, and with a shared set of rules, the company can balance delivery reliability and costs in an efficient and profitable way. We have developed 5 ground rules for your ABC categorization, which ensure the right products in the right quantities.

1. Inventory Policy

Stock items or sourced items? C-items tie up 20-40% of the company's capital and represent a risk of loss and write-offs. By turning selected C-items into sourced items, the company can reduce inventory costs and the risk of write-offs and losses.

2. Delivery Reliability

Most companies aim for a delivery reliability of 98%. However, the company should differentiate its delivery reliability across A-, B-, and C-items to avoid risk and loss. The delivery reliability percentage should be included in the calculation of the minimum stock level. Inact Now can calculate this for you automatically.

3. Minimum Stock Level

In many companies, the updating of minimum inventory levels happens manually and is therefore neglected in a busy day-to-day environment. Inact Now calculates and updates the minimum stock level automatically, taking into account the item's lead time, consumption pattern, and desired delivery reliability.

4. Cost Price

In the pursuit of low cost prices, companies often commit to quantities that are difficult to sell or take a long time to move in the market. For some ABC categories it is low-risk to increase order quantities, but for C-items the company should look critically at order quantities relative to demand.

5. Order Size

Wilson's formula can be used to calculate the right order size, but requires the company to know its inventory and order costs. A more pragmatic approach can be applied using ABC categorization, where you buy enough to cover a number of inventory days or weeks per ABC category.

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