Reorder Level (ROL) is the stock quantity at which a replenishment order should be placed. The standard formula is average consumption multiplied by lead time, plus safety stock. When stock drops to ROL, a purchase indent is triggered.
Why It Matters
For fast-moving standard items like fasteners, packing material, or consumables, running MRP is overkill. ROL is a simple, transparent trigger that factory stores staff understand and purchase can action. It is the workhorse of everyday inventory management in Indian MSMEs.
Example with Indian Context
A fan manufacturer consumes 200 M8 washers per day. Lead time from the Delhi vendor is 5 days, with safety stock of 300 washers. ROL = (200 x 5) + 300 = 1,300 washers. When stock drops to 1,300, the system auto-creates a purchase indent for 5,000 washers (EOQ). No MRP meeting required.
Related Terms
How ERPDrive Handles It
ERPDrive stores ROL per item and fires a purchase indent (or alert) automatically when stock crosses it. The system suggests an order quantity based on EOQ or fixed order size, and shows pending POs so you do not double-order.
See It in Your Factory
ERPDrive handles reorder level as a first-class workflow alongside BOM, MRP, quality, and GST. Book a 30-minute demo.
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