By Wade Lewis
It can be so frustrating when items you need are out of stock. Maybe you need them urgently, or you can’t get the kit you need from your other supplier? If you’ve ever tried to order your PPE a little bit late only to find that what you need is out of stock, then you’re not alone. More importantly, you’re in the right place!
Did you know that at Lion Safety we can offer you services such as stock management forecasting and stock holding?
Well, you do now! We can even offer this for your company’s branded clothing.
As a provider of the kits that will keep your employees safe, we believe that no project should be held up by delays in the supply of safety workwear. That’s why we recommend that you look into stock holding and if it is right for you.
You want PPE ordering to be hassle-free so that you can focus on the job that you’re doing. We want that for you too!
In this article, you will learn:
- What a stock holding agreement is
- Is stock holding is right for you
- Benefits and drawbacks of stock holding agreements
- Who you should involve in decisions around stock holding agreements
- Why solutions like stock holding agreements are important
- What information do we need to forecast stock to fulfil an agreement?
- How to set up an agreement with Lion Safety
What is a stock holding agreement?
This is an agreement between you and us as your supplier, where we agree on a stock level we will hold in our stores to cover a period of time.
This period is generally the lead time it takes for us to order new stock so that you never run out of the PPE you need.
Stock agreements reduce lead times to as little as 1 day and ensure you don’t have to stockpile PPE or experience delays from the point of order.
Is stock holding right for you?
Stock holding may benefit you if:
- You require regular, consistent orders of new PPE
- You are regularly taking on new staff members who need PPE
- You know that you will need to replace current staff PPE at a specified time or interval
- You are a regular customer who needs access to stock fast
- You don’t have time to manage PPE for your staff
- You are willing to secure a credit account with Lion Safety
Stock holding is not right for you if:
- You are purchasing PPE as a one-off
- You only need small quantities of the product
- You aren’t able to get a credit account with Lion Safety
If any of the above sounds familiar, stock holding probably isn’t a service that will benefit you.
What are the benefits of stock holding?
Stock holding is a great solution for clients with a large workforce (more than 150 operatives), who also work on busy and demanding infrastructure projects that have strict deadlines. This is because:
- It can drastically reduce the amount of stock you need to hold (and who doesn’t like to free up storage space?)
- If you provide accurate data about your usage, we can forecast so that you never experience delays due to stock. Don’t worry, our sales team or your account manager can take you through this.
- Need branded items to be held in stock, ready for your next staff member to join? We’ve got that covered too. This also comes down to forecasting. For example, if you know you will take on new staff who will need branded waterproof jackets, we can hold an agreed amount of pre-branded waterproof jackets ready to go in time for the start of their employment. This is also good if you need a garment urgently.
In the end, a stock holding agreement reduces time lost working on projects because your operatives are not waiting for their clothing.
What are the drawbacks of stock holding?
Open disclaimer; we are advocates of stock holding, BUT it doesn’t suit everyone.
Here are some of the reasons we’ve found people don’t want to have a stock holding agreement:
- Some suppliers like to tie exclusivity into these contracts, meaning you’d need to buy all your PPE from them.
While this isn’t the case with Lion Safety, many people we speak with are reluctant to enter into a stock agreement having had this happen at other suppliers. Again, Lion Safety does not include exclusivity in our stock holding agreements.
We know we can’t be everything to everyone; we specialise in technical workwear, Hi-Visibility clothing, footwear and outdoor worker PPE (helmets, gloves, etc.). Because of this, we would never ask you for exclusivity. We understand that we will not be the best supplier for your needs if you require items we do not carry, such as office clothing and janitorial products.
- You will need to take on stock leftover from a stock agreement.
We forecast usage to determine stock holding requirements with a lot of care and attention, ensuring that you won’t need to take a bulk of stock at the end of that contract. We will only hold the amount of stock we have agreed you will require. However, if you do not use the stock, you are required to take any stock remaining (especially when in the contract).
- Commitment from both parties and potential business process change
Both client and supplier need to work together to make a stock holding agreement work. This can even involve process changes in your business, such as the way you order and plan for forecasts.
You’ll need to be open-minded. When putting in place a technical workwear or safety clothing agreement, the best suppliers understand that everything starts with education around the best and most up-to-date practices.
This is why we work with you as often as you need to answer all of your questions and find a solution that works for you and your company.
Scared of commitment? We understand that contracts can be scary, especially when trying out a new supplier. Get in touch with our Business Development Team today to discuss your fears and drawbacks.
Who should be involved in stock management discussions?
It’s always important to involve stores and yard supervisors/managers. Health and Safety should be involved from a technical standpoint and procurement from a contract management standpoint. Involving the above parties helps to guard against surprise barriers (like budget restrictions and internal approval/procurement processes).
Last but certainly not least, if the stock holding agreement is going to involve company-wide change, we find that having a director, team lead, and/or company leader on board from the very beginning of your journey ensures that the implementation of the process is seamless and successful.
Why is having a stock holding solution important?
If employees don’t have the correct kit or the right amount of kit, they can’t fulfil their job. This can lead to delays in project start times and risks potential for a bad company reputation.
By being able to control your PPE stores through forecasted stock holding, you can get more accurate management reports on what PPE you’ve used. You can also track spending and waste. This information will help you to better forecast future stock holding. It will also enable your Business Management to accurately identify any wasted costs, such as employees not looking after their equipment, or buying more than is needed. From here you can identify if there is a product that could be replaced with either a higher or lower quality product due to incorrect use.
What information do you need to forecast stock for holding?
- Employee count
- What your annual usage was for the last 12 months. (If you don’t have this, how many employees do you have, what is the employee turnover rate, and how many garments do you allocate to each employee?)
- Info about unexpected demand (eg. if you have a large project coming off which will have a significant increase on your employee headcount).
- How long do their current products last, i.e. do you throw products away after one use or do they last you 6 months?
- The current products you use and at what price-point
How do I set up a stock agreement with Lion Safety?
First, you need to have the data available of what you’ve ordered and the quantity (ideally annually) for all the products you use. This must be shared with your consultant.
Then, you need to address any factors that affect those quantities. This could be:
- Employee turnover
- Average project duration
- Were there any cross-overs on products? For example; did you buy 3 types of hi-vis that could’ve been a larger order of 1 type which would have saved you money.
- Minimum stock levels of the clothes you need including branded and non branded stock you would need available at any time.
To hold stock, a signed agreement must be in place that ensures you will take the stock you have worked with us to forecast for you. We will only hold as much stock as your agreed credit limit will allow.
Where to start if I want to set up a stock holding agreement with Lion Safety:
If you require regular orders of PPE that will arrive fast, you’re probably going to want to set up a stock holding agreement.
Your next steps are: