What is min/max stock control?
Min/max is a replenishment rule: when stock falls to the minimum, you order enough to bring it back to the maximum. That is the entire method. It is the simplest workable form of stock control and, for most consumables in most stores, it is enough.
Two numbers per item. The minimum is the trigger, set by how much you get through while waiting for a delivery. The maximum is the ceiling, set by pack sizes, shelf space and how much cash you will leave standing still. Almost every other technique refines these two numbers, so get them right before buying software to calculate them.
- Minimum equals usage over lead time plus a buffer for variability.
- Maximum equals the minimum plus a sensible, practical order quantity.
- Lead time means noticing to on-the-shelf, not the supplier's quoted days.
- The rule reacts to demand. It never anticipates a mobilisation.
- A trigger nobody looks at is decoration, not stock control.
How to set the minimum
The minimum is the reorder trigger, and it answers one question: how much will we use before the replacement arrives? Take average usage over the lead time then add a buffer for the weeks that run hot.
Worked example. You issue about 40 pairs of gloves a week and lead time is three working days, so usage over the lead time is roughly 24 pairs. Set the minimum at 40 and the buffer above lead-time usage is 16 pairs, about two working days.
- Use real lead time. Not the supplier's quoted days. Count from someone noticing the bin is low to the goods being on the shelf, including the day the requisition sat waiting for approval.
- Size the buffer to the consequence. A stockout that stops a gang justifies a fat buffer. One that means a walk to the other store does not.
- Watch supply reliability too. An item with an unreliable lead time needs a higher minimum than its usage alone suggests.
How to set the maximum
The maximum is the minimum plus a practical order quantity. It answers a different question: how much is sensible to buy at once? The constraints here are physical and financial, not statistical.
- Pack multiples. If it comes in boxes of 100 there is no point calculating a top-up of 63.
- Space. The maximum has to fit the location. A number that overflows the bin means back stock in a corner that nobody counts.
- Shelf life. Never set a maximum holding more than the item's usable life at your rate of use.
- Cash and price breaks. A price break is only worth taking if the extra cover justifies the money standing still and the space it fills.
A sanity check: for fast-moving consumables the maximum usually lands between three and eight weeks of cover. If the arithmetic hands you a year of stock to hit a price break, buy that item as required instead.
Where min/max fails
Min/max fails quietly when demand is lumpy rather than steady. The rule is reactive by design: it does nothing until stock has already fallen. A mobilisation or a phase change empties the bin before the trigger achieves anything useful.
- Known peaks. For a planned mobilisation or shutdown, raise the minimum in advance rather than trusting the rule to catch up.
- Nobody looks. The trigger only fires if someone checks the bin or the system is fed accurate issues. Min/max on an uncounted shelf is decoration.
- Levels set once. Numbers set at handover and never revisited become fiction within a year. Review at phase changes and after anything that alters the lead time.
- Hidden stock. Gang caches and back stock in a container make the count meaningless and push levels up to cover material you already hold.
- Slow movers. On an item used four times a year, average usage over lead time is close to nothing and the calculated minimum is useless. Set those by criticality, not by formula.
Min/max compared with imprest and kanban
All three do the same job differently. Choose by who is doing the counting.
- Min/max. Quantity-triggered. Order when stock hits the minimum, up to the maximum. Suits a stores team that counts.
- Imprest. Calendar-triggered. Top every line back to a fixed level on an agreed visit, however far it has fallen. Suits a supplier replenishment run.
- Kanban. Signal-triggered. Emptying a bin or pulling a card is itself the order. Suits a fixed layout with steady flow and needs no counting at all.
Two-bin working is the practical middle ground: split the holding into two containers, open the second when the first empties, and treat that as the reorder signal. The second bin is your minimum, and the rule enforces itself.
Common questions
What is the formula for min/max stock levels?
Minimum equals average usage over the lead time plus a safety buffer. Maximum equals the minimum plus a practical order quantity, adjusted to pack sizes and available space. The order quantity is then the maximum minus current stock. Keep the arithmetic visible so anyone can see why a level is what it is.
How is min/max different from a reorder point?
The minimum is the reorder point. The difference lies in what you order when it trips. A reorder point system typically orders a fixed economic quantity every time; min/max orders a variable quantity that brings stock back to a set ceiling. Min/max is easier to run by eye, which is why stores prefer it.
How often should min/max levels be reviewed?
At every change of work phase, and at least quarterly for fast-moving lines. Also review after any supplier or lead-time change, since the minimum is built on that lead time. Look at exceptions first: lines that stocked out, and lines that have not moved since the last review.
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