Reorder Process for General Contracting
Reorder Process is the structured method for keeping commonly used tools, parts, and consumables in stock without frequent shortages or excess inventory. It defines how minimum and maximum levels are set, how stock is monitored, how reorder lists are generated and approved, and how new stock is received, recorded, and put away. The process ensures that crews have what they need on hand while keeping cash tied up in inventory under control. When followed, it reduces rush orders, downtime, and guessing about what to buy and when.
Define stocked items and reorder policies
Step 1: List all commonly used consumables and small parts
Work with field leaders, the yard, and purchasing to compile a list of items that are used repeatedly across jobs, such as anchors, blades, grinding discs, fasteners, and basic PPE. Include item descriptions and any existing item or SKU numbers.
Step 2: Decide which items will be treated as stocked
From that list, identify which items you intend to keep on the shelf at all times (stocked) versus items that will be ordered only when needed for a specific project. Mark each item as “Stocked” or “Non-stocked.”
Step 3: Define general reorder rules by item category
For each category (for example, fasteners, abrasives, PPE), decide whether you will use simple min/max levels, order-to-full-bin, or fixed-period ordering. Document these general rules so similar items are managed in similar ways.
Step 4: Identify storage locations and owners for stocked items
Map where stocked items are stored (yard, tool room, jobsite containers) and assign a primary owner for each location. This person will be responsible for keeping bins organized and supporting the reorder process.
Step 5: Record policies in a master stocked items list
Create a spreadsheet or system record with item name, ID, stocked/non-stocked status, default storage location, category, and reorder method. Save it in a shared location used by equipment, purchasing, and project teams.
Step 6: Review and update the stocked list periodically
On a set schedule (for example, twice a year), review the list with field and purchasing to add high-usage new items and remove items that are no longer worth stocking.
Set minimum, maximum, and reorder points for stocked items
Step 1: Gather usage history and lead time information
For each stocked item, review past purchase records and field feedback to estimate how many units are used per week or month. Also note how long it typically takes to receive a new order from the primary vendor (lead time).
Step 2: Decide on safety stock levels
Based on usage and lead time, decide how much extra stock you want on hand to cover delays or spikes in usage. This “safety stock” can be a fixed number of units or a percentage of typical usage.
Step 3: Calculate a minimum (reorder point)
Set the minimum level at which you will place a new order. A simple method is: minimum = (average usage during lead time) + safety stock. Adjust up or down based on how critical the item is and how much space you have.
Step 4: Set a maximum or standard order-up-to level
Decide how full you want to fill the bin or shelf when you reorder. This could be a max quantity (for example, “keep 1,000 screws on hand”) or a standard pack quantity from your vendor. The difference between max and minimum is your typical order size.
Step 5: Record min, max, and reorder points in your system
Enter these values for each item into your inventory or reorder spreadsheet. Make sure the fields are clearly labeled and easy to view for those who will be checking stock.
Step 6: Review and adjust numbers after initial trials
After a few ordering cycles, revisit the min/max levels for items that are frequently short or always overflowing. Adjust settings to better match actual usage and lead times.
Perform regular stock checks against reorder points
Step 1: Set a stock check schedule by area
Decide how often each storage area will be checked (for example, weekly for the main tool room, bi-weekly for site containers, monthly for rarely used locations). Document this schedule so it is consistent.
Step 2: Assign a responsible person for each check
Name the yard supervisor, tool coordinator, or site foreman who will perform the stock check for each location. Make sure they understand this is part of their recurring duties, not an optional extra.
Step 3: Provide current min/max list to counters
Give the person doing the check a copy of the stocked items list for their location, including item IDs, descriptions, and min/max/reorder levels. Ensure they are looking at the latest version.
Step 4: Physically count or estimate remaining stock
For each stocked item, have the responsible person either count the exact quantity or, for bulk items like screws, estimate remaining stock by bin fill level (for example, “bin half full” if your method supports this).
Step 5: Compare on-hand amounts to minimum levels
As they go, the checker notes items that are at or below their minimum (reorder point). For digital systems, they can record both the on-hand quantity and a simple “needs reorder” flag.
Step 6: Compile a preliminary reorder list
At the end of the check, the responsible person compiles a list of all items at or below minimum and passes this to the person in charge of reorder review (typically equipment or purchasing).
Generate and verify reorder quantities
Step 1: Review low-stock item list
Start with the list of items flagged as at or below minimum during the stock check. Confirm that each item on the list is still in active use and that nothing was included by mistake.
Step 2: Calculate suggested order quantities
For each item, subtract the current on-hand amount from the maximum level to determine how many units you need to reach your “full” level. If you use standard vendor pack sizes, adjust the quantity to the nearest pack size.
Step 3: Check recent usage trends
Look at recent usage patterns for items that are volatile. If usage has increased or decreased significantly, adjust the order quantity up or down to match expected near-term needs rather than just repeating the past.
Step 4: Consider upcoming projects or seasonal factors
Ask project managers or yard staff about upcoming work that might cause a spike or drop in usage, such as a large concrete project requiring more anchors. Adjust order quantities to account for these known events.
Step 5: Flag unusual or high-dollar orders for closer review
If the calculated quantity for a high-cost item seems large compared to past orders, mark it for a closer look during the approval step. Note why this item stood out so approvers can quickly see the concern.
Step 6: Prepare a draft reorder report for approval
Compile all items and proposed quantities into a reorder report or purchase requisition list and send it to the designated approver, along with any notes explaining adjustments or concerns.
Review and approve reorder lists
Step 1: Confirm items are still needed and current
Go through the reorder report line by line to ensure each item is still stocked and active. Remove any items that are being phased out or replaced by different models or standards.
Step 2: Check quantities for reasonableness
Compare proposed quantities to past orders, storage capacity, and budget constraints. Watch for quantities that are far larger or smaller than typical without a clear explanation.
Step 3: Review high-cost or unusual lines in detail
For items previously flagged as unusual, read any notes and, if needed, talk to the yard or field to confirm that the proposed quantity is truly needed. Adjust quantities where appropriate.
Step 4: Verify alignment with budgets and purchasing policies
Check whether the total spend for this reorder cycle fits within the relevant budget for tools and consumables. Confirm that items are being sourced from approved vendors and in compliance with purchasing policies.
Step 5: Approve, adjust, or reject individual lines
Mark each line as approved as-is, approved with changes to quantity, or rejected (with a short reason). Aim to fine-tune the order rather than remake it from scratch.
Step 6: Finalize the approved reorder list
Once review is complete, create a clean version of the reorder list showing only approved items and quantities. Send this final list to purchasing or whoever will create the purchase orders.
Create and issue purchase orders for replenishment
Step 1: Select primary vendors for each item
For each approved item, identify the preferred vendor based on existing agreements, pricing, and past performance. If multiple items come from the same vendor, group them on one PO where possible.
Step 2: Populate PO with item and quantity details
For each vendor, enter item codes, descriptions, approved quantities, unit prices (if known), and any agreed discounts into your purchasing system or PO template. Double-check that quantities match the approved reorder list.
Step 3: Add delivery instructions and required dates
Specify delivery location (yard, tool room, or specific jobsite), contact person, and required delivery dates based on current stock levels and usage. Include any special access instructions that the vendor needs to know.
Step 4: Review POs before issuing
Quickly review each PO for completeness and accuracy: correct vendor, ship-to address, item lines, and totals. Correct any typos or obvious errors before sending them out.
Step 5: Obtain required approvals if applicable
If your company requires a manager or finance approval above certain dollar thresholds, route the PO for approval and wait for sign-off before sending to the vendor.
Step 6: Send POs to vendors and file copies
Email or submit POs through the vendor’s portal as required. Save a copy of each PO in your purchasing or document management system, linked to the reorder cycle for easy reference.
Track order status, deliveries, and backorders
Step 1: Maintain an open order tracking log
Create or update a log that lists all open POs, vendors, items, quantities, promised delivery dates, and actual delivery dates. Keep this log current as shipments arrive or schedules change.
Step 2: Confirm acknowledgments and delivery dates
After sending POs, review vendor acknowledgments for any changes in price, quantity, or delivery dates. Update your tracking log with these confirmations and flag significant delays.
Step 3: Monitor approaching delivery dates
On a regular schedule (for example, weekly), check which deliveries are due in the coming days. Contact vendors for updates on any orders that have no confirmed shipping information close to the due date.
Step 4: Identify backordered or partially filled items
When deliveries arrive, note any items that are missing or only partially filled. Confirm with the vendor whether these items are backordered and get updated expected ship dates.
Step 5: Communicate delays to affected stakeholders
If backorders or delays will affect yard stock or project availability, notify superintendents, the yard, and purchasing so they can plan around gaps or consider temporary alternatives.
Step 6: Update tracking log and decide on follow-up actions
Record all status changes in the log. For critical items with long delays, discuss options such as alternative vendors or substitute products with purchasing and operations.
Receive, verify, and put away replenishment stock
Step 1: Prepare receiving area and paperwork
When a delivery is expected, clear space in the receiving area and print or open the relevant PO and packing lists. Having documents in hand speeds up verification.
Step 2: Check delivery against packing list and PO
As items come off the truck, compare each carton or item to the packing list and PO lines: item numbers, descriptions, and quantities. Mark off items on the documents as they are verified.
Step 3: Inspect items for obvious damage
Before signing any delivery papers, inspect boxes and visible items for damage such as crushed packaging, broken seals, or water exposure. Note any damage on the carrier’s paperwork and take photos if needed.
Step 4: Record any discrepancies or shortages
If quantities do not match the packing list or PO, or if wrong items were shipped, record these discrepancies clearly on your receiving documents and in your tracking log. Separate incorrect items so they are not accidentally stocked.
Step 5: Label and store items in correct locations
Apply internal labels or bin labels if needed and place items in their assigned bins, shelves, or storage areas. Keep the organization consistent with your inventory list so future counts and picks are easier.
Step 6: Sign receiving documents and share with office
Once verification is complete, sign any vendor delivery documents and send copies or scans to the office or purchasing. This supports invoice matching and closes the loop on the order.
Update inventory records after replenishment
Step 1: Record received quantities in inventory system
For each item received, enter the actual quantity into your inventory or asset system and link it to the appropriate PO or receipt record. Make sure item IDs and locations are correct.
Step 2: Adjust on-hand quantities and available stock
Increase on-hand quantities for each item by the amount received. If you track by location, allocate quantities to the correct yard, tool room, or site storage.
Step 3: Update status of backordered lines
If an item was previously backordered and has now arrived, update the tracking log and the PO status to show that the backorder has been partially or fully filled. Note any remaining backordered quantity.
Step 4: Match receipts to vendor invoices
Provide receiving information to the accounting or purchasing team so they can match vendor invoices to actual receipts. Flag any invoices that do not match what was received for further review.
Step 5: Check min/max compliance after receipt
Quickly verify for a few key items that the new on-hand levels are between minimum and maximum. If something is still below minimum after receipt, investigate whether the order quantity or data entry was incorrect.
Step 6: Save and organize receiving records
Store copies of receiving documents, updated logs, and any discrepancy notes in a structured folder or within your system. This documentation will be important for future audits and problem solving.
Review reorder performance and adjust settings
Step 1: Collect data on stockouts and overstocks
Gather information on items that frequently ran out and items that consistently sat over maximum levels. Use inventory reports, field complaints, and emergency purchase records as sources.
Step 2: Analyze reorder frequency and order sizes
Look at how often each stocked item is being reordered and in what quantities. Items reordered very frequently in small amounts or rarely in very large amounts may need min/max adjustments.
Step 3: Gather feedback from yard and field staff
Ask the yard, tool room, and foremen which items they feel are always a problem to keep in stock, and which items they rarely use despite being stocked. Capture specific examples.
Step 4: Identify items needing parameter changes
Based on data and feedback, list items whose minimum, maximum, or safety stock should be adjusted, and any items that should be added to or removed from the stocked list.
Step 5: Update min/max levels and vendor strategies
For each identified item, recalculate and update min/max and reorder points. If vendor performance has been poor (late deliveries or frequent errors), consider switching preferred vendors for those items.
Step 6: Document changes and monitor impact
Record what changes were made, when, and why. In the next few reorder cycles, pay special attention to these items to see whether stockouts and overstocks improve, and adjust further if needed.
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