A continuous challenge in the growing church is making sure every area has what it needs at all times regarding supplies. You know … paper towels, cleaning materials, paper, and many other items are required to sustain the ministry weekly. Have you ever sent someone to the convenience store for AA batteries on Sunday morning (right before the service starts)? Or how about running out of grape juice during the 2nd of 3 services?
No matter its size, every ministry has a continuous need for supplies. And, just like any other area of church operations, a system has to be developed and implemented that ensures that supplies are stocked and replenished as needed. Implementing a Reorder Point Based Supply System has been the solution in the manufacturing industry, where this is also an ongoing challenge.
It’s pretty simple, really. When the amount of supply (grape juice, batteries, paper, pens, diapers, baby wipes, crayons, etc.) gets to a pre-established quantity (reorder point), a demand signal is generated, and the supply is replenished.
The simplest way to implement your Reorder Point Based Supply System is to establish a location in your facility you’ll call the stockroom. Equip the stockroom with shelving upon which you will place containers (plastic bins, boxes, etc.) to hold the supply items. The size of the container is determined by the size of the item and the amount of the item stocked at the maximum. (I’ll explain how to determine this a little later.) The container is then labeled, and a card is created with the same label to go along with the container. An individual (staff member or volunteer) is then assigned to go through the stockroom on the same day each week (Monday or Tuesday?) to look at each container to determine if the Reorder Point (ROP) has been reached. If it has, the card is “pulled” and given to the individual responsible for ordering supplies. The other thing that individual does on that day of the week is open newly received supplies from the previous week and put them in their designated container. It’s as simple as that.
All that is left is establishing three essential variables: ROP, Order Quantity, and Stock Quantity. The ROP is calculated based on usage. You must ensure more supply is ordered and received before you run out. Let’s take AA batteries, for example. If your church has ten wireless microphones, each using 2 AA batteries per week, the usage (assuming this is the only place AA batteries are used in your church) is 20 AA batteries per week. If it takes two weeks total time from order placement to receipt and restocking to get more batteries, then you must generate your “demand signal” when you reach 40 (at a minimum) batteries left in stock. The ROP is, of course, 40.
The Order Quantity is determined item by item. It’s a combination of how the particular item is ordered (each, box, sleeve, case, etc.), the usage, and how frequently you want to order it. Let’s use our batteries as an example again. Batteries are usually sold in a package; the larger the package, the lower the price. So, let’s say we will order batteries by the “package.” The next thing to consider is the usage. In this case, we use 20 batteries per week. If we only want to order batteries once per month, then our order quantity will be a minimum of 80 (4 weeks x 20 batteries). The 80, of course, can be eight packages of 10, four packages of 20, etc. This decision is based on the best cost and availability.
I said I would address how to determine the size of the container earlier in this article. By now, it should be pretty obvious to most. You have to base the size of the container on the Stock Quantity … the maximum amount of stock, worst case. Sticking with the batteries … if an order is placed when the stock is down to 40 and the order quantity is 80, the container should be sized to hold 120 batteries at a maximum. You might think, “But the original 40 are gone by the time the 80 are received, so why not size the container for 80 instead of 120.” This is a good question, especially if space is limited in your stockroom. But what if things don’t go exactly according to plan? For example, after the ROP is reached and an order is placed, weekend services are canceled due to the weather, and usage drops. Or the amount of microphones normally used on a Sunday is reduced to only one for some reason. The point is that things don’t always go according to plan. And the last thing you want is to receive a bunch of batteries and not have anywhere to put them.
If you’re thinking this through, you’ve probably already observed that the opposite could also happen… usage could increase. What if you get a bad batch of batteries that don’t last as long, or more services are planned for a particular two-week period? Obviously, the ROP is reached faster, which results in an order being placed sooner. If the increase in usage continues, the supply of AA batteries could run out before the new batteries are received. There are many ways to approach this situation, but my experience has told me that establishing an adjustment percentage is a good way to go. For example, the ROP of 40 could be increased to 50 to improve the system’s ability to handle changes in demand.
Once the system is implemented, it is continuously evaluated, and quantities are adjusted. Like many other systems, tweaking and adjustment are required over time.
Give it a try, make adjustments, and watch your supply issues disappear!