Min Max System

The min-max system is an inventory replenishment method that sets a minimum stock level to trigger reorder and a maximum stock level as the replenishment target. It monitors on-hand plus on-order inventory and places an order when total available stock falls below minimum, sizing the order to restore inventory up to maximum.

In a manufacturing setting, min-max control is used item by item at the line side, in the forward pick face, and in raw material stores. A typical trigger condition is computed from safety stock plus daily usage times supplier lead time. When operators scan withdrawals, the ERP or WMS compares total available stock—on-hand plus on-order—against the minimum. Once the threshold is crossed, the system generates a purchase requisition, internal transfer, or replenishment work order sized as maximum minus on-hand minus on-order. On the shop floor, this supports supermarkets and kitting areas for fasteners, labels, or bearings: the minimum covers consumption during lead time plus buffer, and the maximum prevents overfilling and congestion. In warehousing, location-replenishment tasks move product from reserve to high-velocity pick face only when needed. For inbound-dependent materials like resin or coil, the same logic aligns reorder timing with consumption and open receipts, creating the sawtooth inventory pattern.

• ⚠️Stockout from lead-time drift: If supplier lead time increases but the minimum is not updated, the reorder trigger fires too late, leading to line stoppage, missed picks, or expediting costs.
• ⚠️Overstock from demand volatility: A fixed maximum can overshoot actual needs when demand spikes or becomes erratic, driving excess carrying cost, obsolescence, and write-offs.
• ⚠️Distorted replenishment from poor inventory accuracy: Wrong on-hand balances due to mis-scans, unposted scrap, or delayed receipts may suppress needed replenishment or trigger early orders, showing up as empty pick faces despite system stock.