How to Create a Stock Ordering & Reorder for Trades & Construction
A repeatable process for determining reorder needs, placing purchase orders with suppliers, and tracking deliveries to maintain optimal stock levels.
Purpose
To prevent stockouts and overstocking by establishing clear reorder points, streamlining the purchasing workflow, and maintaining strong supplier relationships.
Scope
Covers the full ordering lifecycle from identifying reorder needs through to confirming receipt. Does not cover inventory counting (see Inventory Management SOP) or supplier contract negotiation.
Prerequisites
- Access to the inventory management and purchasing systems
- Approved supplier list with current contact details and pricing
- Defined reorder points and minimum/maximum stock levels for all items
- Budget approval or spending authority for standard orders
Compliant with Safe Work Australia requirements, state WHS legislation, and Building Code of Australia (NCC) documentation standards.
Step-by-Step Procedure
Review Inventory Levels Against Reorder Points
Check current stock levels for all items and compare them against the established reorder points. Generate a list of items that have reached or are approaching their reorder threshold.
- 1.1Run the stock level report from the inventory management system
- 1.2Filter for items at or below their reorder point
- 1.3Cross-reference with upcoming demand forecasts or scheduled events
Determine Order Quantities
Calculate the optimal order quantity for each item based on reorder levels, lead times, economic order quantity, and any bulk discount thresholds.
- 2.1Review historical consumption rates for each item
- 2.2Factor in supplier lead times and delivery schedules
- 2.3Adjust quantities for known upcoming events or seasonal changes
- 2.4Apply economic order quantity calculations where applicable
- Round up to full case or pallet quantities to avoid partial shipments
Select Suppliers and Confirm Pricing
Identify the preferred supplier for each item, confirm current pricing and availability, and evaluate alternatives if the primary supplier cannot fulfill the order.
- 3.1Check the approved supplier list for preferred vendors
- 3.2Verify current pricing and any applicable discounts
- 3.3Confirm supplier stock availability and estimated delivery dates
Create and Submit the Purchase Order
Generate a formal purchase order in the purchasing system, including all item details, quantities, pricing, delivery requirements, and payment terms.
- 4.1Create a new purchase order in the purchasing system
- 4.2Enter all line items with correct quantities, pricing, and descriptions
- 4.3Specify the required delivery date and delivery address
- 4.4Submit the purchase order for approval if above the self-approval threshold
Obtain Approval for High-Value Orders
For orders exceeding the standard approval threshold, route the purchase order to the designated approver with supporting justification.
- 5.1Attach a summary of the order rationale and supporting data
- 5.2Send the approval request through the purchasing system
- 5.3Follow up if approval is not received within 24 hours
Send the Order to the Supplier
Transmit the approved purchase order to the supplier via the agreed method and request written confirmation of receipt and expected delivery date.
- 6.1Send the purchase order via the supplier portal or email
- 6.2Request order acknowledgment and confirmed delivery timeline
- 6.3Record the confirmation details in the purchasing system
Track the Order Through Delivery
Monitor the order status from placement through delivery. Follow up on any delays and communicate expected arrival to the receiving team.
- 7.1Check the order status periodically using tracking information
- 7.2Contact the supplier if the order is overdue or tracking stops updating
- 7.3Notify the receiving team of the expected delivery date and contents
Confirm Receipt and Close the Order
Once the delivery is received and verified by the receiving team, match the delivery against the purchase order, close the order in the system, and authorize invoice payment.
- 8.1Compare the delivery note to the purchase order for accuracy
- 8.2Record any short shipments, damages, or substitutions
- 8.3Close the purchase order and route the invoice for payment
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
Percentage of times an item is unavailable when needed, targeting less than 2%.
Percentage of purchase orders received correctly and completely, targeting 95% or higher.
Reduction in the dollar value of excess inventory compared to the prior period.
Frequently Asked Questions
How do I handle a partial delivery?
Accept and receipt the items received, note the shortfall in the system, and contact the supplier to arrange delivery of the remaining items. Do not close the purchase order until all items are received.
How often should reorder points be reviewed?
Reorder points should be reviewed quarterly or whenever there is a significant change in demand patterns, supplier lead times, or business volume.
What happens if a supplier cannot fill our order?
Contact the approved backup supplier listed in the supplier management system. If no backup is listed, escalate to the Operations Manager to identify an alternative.
Who can approve emergency or after-hours orders?
The Operations Manager or General Manager can approve emergency orders outside of normal business hours. Job card the emergency justification and follow up with a formal purchase order the next business day.
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